Efficient Demand and Fulfillment Planning. Gabriel Werner, Senior Solution Consultant

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1 Efficient Demand and Fulfillment Planning Gabriel Werner, Senior Solution Consultant 1

2 Agenda - Forecasting and Demand Planning - Fulfillment and Replenishment Planning - Customers 2

3 What if You could estimate your customers demand more precisely?

4 What s in a forecast? HISTORY Past Future

5 Forecasting HISTORY TREND Past Future

6 Forecasting SEASONALITY HISTORY TREND Past Future

7 Forecasting EVENTS SEASONALITY HISTORY TREND Past Future

8 Forecasting PROMOTIONS SEASONALITY HISTORY TREND Past Future

9 Example Hierarchy ALL Departments / Regions Sub Department Channel National Category Store Cluster Family Store Sub-Family Product-Group

10 Reconciliation Options Top-Down Middle-Out Bottom-Up Product Summary Product Summary Product Summary Category / Region Category / Region Category / Region SKU / Facility SKU / Facility SKU / Facility

11 Consensus Forecasting New adjustments highlighted & finalized Baseline forecasts managed by exception

12 Software Demo - Use Case David, Demand Manager Remeber last years BOGOF promotion? I wonder what the effect on the demand was... And what if we d do the same promotion again?... 12

13 Demand Forecasting Process Analyze & Classify Demand Simple process Forecast Generation Fast workflow Automated! Adjustments Consensus & Publish Consensus & Publish Market intelligence On Exception Basis! Share and finalize forecast Collaborative Workflows!

14 Demand Classification Process Step 1: Analyze History and assign to classes. Step 2: Recommend and configure one or more of the algorithms. Fourier MLR Holt-Winters Step 3: Update Demand Forecasting Unit parameters Update DFU Lewandowski AVS Graves Crostons Moving Average

15 Agenda - Forecasting and Demand Planning - Fulfillment and Replenishment Planning - Customers 15

16 What-if... You had balanced stocks? Location A Location B Location A Location B Demand Stock Demand Stock

17 Fulfilment Planning Cycle Inventory Manufacturing / Planning/ Scheduling Import actual transactions and forecast Transporation/ Logistics Report results Calculate distribution plan Plan review and approval Calculate deployment plan Review and resolve exceptions Build transporation loads

18 JDA Fulfillment The Two Plans 1. Distribution Plan - Wish List 2. Deployment Demand 100 Supply 90 Factory/ Supplier Forward Planning Factory/ Supplier 0 USDC EDC USDC EDC RDC3 RDC2 RDC1 10 RDC3 RDC2 10 RDC1 0 Backward Planning LDC1 LDC2 LDC1 LDC 15 25

19 JDA Fulfillment The Two Plans Distribution Plan - Wish List Replenishment recommendations and Planned on hand stock Entire planning Horizon Business rules to ensure feasibility e.g. lead times, frozen periods, minimum and incremental order quantities. Projection into the replenishments that will be required to meet the demand, such as Independent Demand e.g. Forecasts, Customer orders Distribution Demand placed on a source by a destination, e.g. to maintain target or safety stock levels Dependent Demand e.g. Components or kits Deployment Recommended Shipments to best meet the unconstrained plan based on constrained supply Much shorter horizon Uses business rules to prioritize supply allocation, e.g. Customer priority Meet independant demand first Uses sophisticated forecast netting to identitfy total independant demand Build Transportation Loads (BTL) process combines Recommended Shipments into a vehicle load 19

20 Fulfilment Planning Cycle Inventory Manufacturing / Planning/ Scheduling Import actual transactions and forecast Transporation/ Logistics Report results Calculate distribution plan Plan review and approval Calculate deployment plan Review and resolve exceptions Build transporation loads

21 Software Demo - Use Case We have that extra demand at the Amsterdam site, but not enough stock... Sarah, Supply Chain Manager Wonder if it makes sense to relocate some stock from the Frankfurt site to Amsterdam? Dyn Dep Sourcing (Amsterdam) (Frankfurt) Dyn Dep Sourcing 21

22 Benefits of Demand&Fulfilment 20% Planning 80% Planning 80% Reacting 20% Responding Today The Goal

23 Agenda - Forecasting and Demand Planning - Fulfillment and Replenishment Planning - Customers 23

24 Solid Experience in Consumer Products and the Industries Supporting Them Food AUTOMOTIVE & INDUSTRIAL Beverage AUTOMOTIVE & INDUSTRIAL AUTOMOTIVE & INDUSTRIAL Pharmaceutical & Lifesciences Personal Care & Household Products Consumer Durables Chemical Apparel & Accessories AUTOMOTIVE & INDUSTRIAL AUTOMOTIVE & INDUSTRIAL Paper & Packaging

25 Quick Response to the Changing Buying Behavior Automatically Identifies Demand Patterns and Recommends Statistical Parameters to Produce High Forecast Accuracy No one-size fits all And the size can change Improved Consumer Centricity Improve forecast accuracy for approximately 93% of all products Reduced stockouts by more than 20% Reduced inventory obsolescence by more than 25%

26 Synchronizing the Supply Chain Business Challenge large number of new products manufacturing overtime, expedited shipments and excess inventory need for: consistent processes exception-based planning improved planning cycle times increased forecast accuracy. With JDA Demand, we can compare forecasts, shipment history, as well as POS and order history for any of our SKUs at any given time. At the end of 2007 this resulted in a 10 percent improvement in forecast accuracy. The forecast development cycle time used to take five days and now it takes only two days, allowing our planners to focus on other variations. - Scott Strickland, vice president of information systems, Black & Decker HHI 26

27 Synchronizing the Supply Chain Business Benefits Ability to view POS-level forecasts and actuals at the store level Full order and inventory visibility across the supply chain Consistent processes across demand, supply and manufacturing planning teams Exception-based planning More variable product mix by store Reduced stockouts and inventory levels for component and finished goods Quantifiable Benefits 10.4 percent improvement in forecast accuracy 60 percent reduction in forecast development cycle time 80 percent reduction in monthly production cycles 27

28 Remedy for a Healthier Supply Chain Business Challenge Merck Serono s biggest challenge was the integration of two very different supply chains for traditional pharmaceuticals and biotechnology-based pharmaceuticals. Merck Serono also needed to improve sales forecast accuracy and manufacturing planning to drive production efficiency, as well as reduce inventories in order to increase cash flow. Implementing JDA solutions provides Merck Serono with one synchronized view of demand. Having only one tool as a demand data repository in the entire company worldwide allows us to easily follow an aligned process across the organization. Additionally, having only one-application instance forces us to define clear rules in terms of forecast data availability and process. We now have timelines for data availability and for forecast submissions within the whole organization. - Didier Dayen, head of supply chain process, Merck Serono 28

29 Remedy for a Healthier Supply Chain Business Benefits Increased supply chain visibility by providing a central, worldwide view on sales forecasts for all Merck Serono products, as well as inventory levels and planning parameters Ability to support companywide S&OP process Improved operating efficiencies Improved planning of production orders due to visibility on local inventory levels Standardized and synchronized processes within the organization Additional benefits are also expected in terms of stock reduction, reduction in write-offs and decreased manufacturing costs resulting from better planning, as well as improved sales due to avoided stock-outs 29

30 Integrating Supply Chains Source: Accenture 30

31 Wrap up & Q&A What do You think? 31

32 Appendix What s new in

33 Attach Rates Independent + Dependent Demand Visibility Dependent demand from other source DFUs visible along with independent demand requirements 33

34 Demand 7.8 Feature Highlight: Weather Driven Visibility: Planalytics Integration Understand the impact that weather is going to have on your customer demand 34

35 Planalytics Integration Weather Driven Forecasting Tying visibility of upcoming weather effects into the Demand Workbench

36 History Cleansing Lost Sales Calculation New process to detect and cleanse history for lost sales Available with Base Demand application under Processes and also leveraged within the Shelf Connected Supply Chain Option in Cleanse History Process to Calculate Lost Sales utilizing one of three available methods 36

37 Replenishment Dashboard Dashboard: Dramatically enhance users interaction and exception management workflow across Demand and Fulfillment Focus of the dashboard is a quick way to highlight the status and areas of focus for a planner Dynamic presentation of information that shifts to the area of focus based on problem and need Easy to use visual representation information with details available through minimal clicks.

38 Completely Configurable User Defined Hierarchy Customized Graphs StockOut/StockLow/Overstock by range Quantity Columns SKU Related Columns Grid Data By Hierarchy By SKU

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