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Forecasting for Success: Integrating Sales and Demand Planning
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Tony Kratovil Industry Director Manufacturing & Automotive
Manufacturing’s Future: Going Beyond-the- Product
A Diversity of Manufacturing Customers Driven by Customer Success
Diversified Industrials Durable Goods Heavy Industrials Automotive
Connectivity Revolution in Manufacturing
1970s 1900s 1700s Today
Mechanization
Mass Production
Automation
Connectivity
More Empowered Connected 24x7, mobile-first, social,
enabled by data
Connectivity Drives Demand for Deeper Engagement
New Experience Bar
Smart-enabled
Services Always-on
Relationship Personalized
Engagement
Demand: Engagement Beyond the Product
Going Beyond-the-Product Needs Digitization at 3 Levels
Front-office Engagement 1:1, data-driven, proactive marketing, sales, service
Value Chain Alignment Real-time collaboration around the customer
Agile Innovation Real-time connected product insight driving
new services
Systems of Record
Manufacturers Invested in Systems of Record Digitizes operations, not engagement
Logistics EDW MES ERP Demand Planning HR
Internal Focus Operations – Supply Chain – Infrastructure – Procurement
rely on spreadsheets to track customer
data
61%
Source: 2016 Connected Manufacturing Service Report
Systems of Record
Manufacturers Need a System of Engagement
Logistics EDW MES ERP Demand Planning HR
want to reimagine service with digital
engagement
87%
Systems of Engagement Mobile Cloud Social
Data
Science Internet of
Things
Roadmap to Go Beyond-the-Product
Customer Success Platform for Manufacturing
Inquire-to-Order Unlock ERP
Service Excellence Connected Products
Digitize the Front Office Digitize Alignment Digitize Innovation
Personalize & accelerate customer acquisition
Expedite 1:1 service everywhere
Drive real-time global alignment
Predict & personalize with real-time insight
Cloud Mobile Social Data Science IoT
Unlock ERP
Unlock Data Integrate legacy data into a real-time, extensible, standards-based, scalable cloud platform
Mobile-ize Insight Lightning development UI to build employee & partner apps across HR, Operations, PLM, Quality, Inventory Management
Align Everyone Mobile collaboration, built-in analytics & 3600 customer view, driven by CRM & ERP data, for everyone to align around the customer
Align disconnected value chain globally
Digitize the Front Office Digitize Alignment Digitize Innovation
What is a Fullforce Solution
Transformational Industry Use Cases High Impact, Unique Horizontal Use Cases & Focus Products
Partner Industry Expertise + proven success at anchor customer + Salesforce Customer Success Platform = Fullforce Solution
• Historically inaccurate
• Not timely
• Too many versions/ spreadsheets
• Inaccurate/incomplete forecast
© 2015 Acumen Solutions. All Rights Reserved. www.acumensolutions.com
CONSEQUENCES OF HAVING POOR SALES FORECASTING DATA FOR MANUFACTURERS
Manufacturers have struggled to accurately forecast sales for decades. They lose revenue and carry excess inventory. It is a very expensive issue
WHY THE LACK OF CONFIDENCE IN DATA?
ACCURATE SALES FORECASTS
REVENUE 10%-15%
• Lower level of on-hand inventory (20% vs. 35%) as a % of total sales
• Less unfulfilled backlog (10% vs. 14%)
• Reduced level of obsolete inventory (less than half )
Source: Answering the Sales Forecasting Challenge For Manufacturers by Right90 May 2010)
Three issues are pervasive. The first is supplementing (predicted) historical and market data with (actual) input from customers and distributors
© 2015 Acumen Solutions. All Rights Reserved. www.acumensolutions.com
• What tools and processes help you capture forward looking customer demand?
• What information do you gather to forecast future demand for products and services?
• How often do you review demand forecasts with customers?
• Is there a process for measuring customer forecast accuracy?
CUSTOMER INPUTS REPRESENT INSIGHT INTO TRUE DEMAND HOW DO YOU DO THIS TODAY?
Extrapolative Demand
Statistical Forecast
Judgmental Test
Customer Inputs
Forecast Accuracy
© 2015 Acumen Solutions. All Rights Reserved. www.acumensolutions.com
TYPICAL SALES AND DEMAND PLANNING PROCESS CREATE FORECASTS LACKING INTEGRITY AND THUS CONFIDENCE
Issue two: Typical sales forecasting/demand management is a long, manual process supported by spreadsheets. It cannot support timely changes and updates
Sales Rep and Customer develop 4-
24 month demand forecast
Sales Rep uses Excel template to record
forecast
The Demand Team consolidates
templates
The Demand adjusts data, models scenarios and
calculate customer volumes
Demand Team output used to create
financial forecast
The MRP process translates volumes to
the Build List and component parts
4-24 month Component forecast
sent to suppliers
Done w/o customer input or market data
Limited Controls = poor data
Manual and time consuming
Based on inaccurate data
Compensates for poor data
Based on inaccurate data
Overcompensation= excess inventory
Customer sends 0-4
month delivery
schedule weekly
© 2015 Acumen Solutions. All Rights Reserved. www.acumensolutions.com
DATA ACCURACY + $000K IN SAVINGS + 60% REDUCTION IN ORDER ENTRY TIME
The third issue is incomplete data that lacks the details that demand planning teams need. Imagine if there were a solution that addressed all three
ACCURATE FORECASTS REVENUE
• Lower level of on-hand inventory
• Less unfulfilled backlog
• Reduced level of obsolete inventory
Key factor for success #1 Allow those that have a critical sales forecasting role to use the same system
4/7/2016 © 2015 Acumen Solutions. All Rights Reserved. www.acumensolutions.com 6
SALES REPRESENTATIVE
• From the Opportunity
• Create sales forecast
• Overview of forecast page
• Transfer Volume to Build Lists
• Control distributor access
• Update sales forecast
• Add notes and submit the sales forecast
DISTRIBUTER
• View the sales forecast
• Update the sales forecast
• Add notes and comments
• Add notes and submit the forecast
DEMAND TEAM
• Global forecast lock
• Ability to update forecast
• Global Unlock
• Add notes and comments
Key factor for success #2 Make it easy to provide information for all key players involved
© 2015 Acumen Solutions. All Rights Reserved. www.acumensolutions.com
COLLECT INPUT FROM SALES AND SALES OPS TEAMS
SUPPORT UPDATES TO MULTIPLE ACCOUNTS
PROVIDE CONTEXT USING ERP DATA
ALLOW DEMAND TEAMS ACCESS/CONTROL
Key Factor for success #3 Allow sales/distributer teams to forecast based on the data they have
© 2015 Acumen Solutions. All Rights Reserved. www.acumensolutions.com
CALCULATE COMPONENT QUANTITIES FROM PRODUCT FORECASTS
© 2015 Acumen Solutions. All Rights Reserved. www.acumensolutions.com 9
Successful sales forecasting solutions allow teams to provide accurate customer forecasts when supply agreements are signed and as demand is updated
• Captures high level product forecasts and maps them to component parts
• Aggregates sales and market forecast data while providing sales reps context on actuals from ERP systems to improve accuracy
• Supports integrated business planning between sales and demand teams
• Highlights shifts in demand using near real-time information
• Ease of use: Captures forecast data from sales, using a sales system
• Scales to complex sales organizations with geographical territories, global clients
• Configurable to support your forecasting measures
• Built on the Sales Cloud, App Cloud and the Communities Cloud
SALES & DEMAND TEAMS COLLABORATE ON SALES FORECASTS WITH FULL VISBILITY
MILLIONS LESS THAN EQUIVALENT ERP APPS
• Inaccurate forecast, Lack of details • Incomplete forecast that are not timely • Too many versions/ spreadsheets
WE ADDRESS THE CHALLENGES THAT RESULT IN POOR DATA INTEGRITY
4/7/2016
Fortune 100 Global Equipment Manufacturer increased operating income by 7.5%
© 2015 Acumen Solutions. All Rights Reserved. www.acumensolutions.com 10
• Our client, a global equipment manufacturer, sells products across distribution channels (OEM Stores, Distributors etc.)
• Both Manufacturing and supply chain organizations had limited visibility to ensure right products were manufactured and delivered to its customers
BUSINESS SITUATION
• Inaccurate short term sales forecasts were resulting in inaccurate demand and excess inventory
• Existing forecasting process was manual, supported by spreadsheets with data and version control issues. Collected data sets were hard to manage given complex catalogs across industries
CHALLENGE
• Acumen Solutions conducted blueprint and vision sessions with executives to define current and target business
• Acumen Solutions delivered role based solution to manage demand cycle with formal notification cycles and shorten order entry
KEY ACTIVITIES AND OUTCOMES
KEY BENEFITS
• Enabled Short Term Forecasting (STF) monthly for
up to 27 months ahead
• Long Term Forecasting (LTF) annually for up to 10
years
• Data on Actual’s, Orders and Business Plan for -12
months to +27
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