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AG Barr Meas 1 © The Delos Partnership 2003 Measures Encouraging the right behaviours
AG Barr Meas 2 © The Delos Partnership 2003 Tell me how you will measure me and I will tell you how I will behave Measure me irrationally and I will behave irrationally Behaviour issue
AG Barr Meas 3 © The Delos Partnership 2003 Forecast Accuracy Definition Purpose Horizon Source of Information Percent of items within a tolerance Assess the degree of flexibility required by the supply side and to improve the process Cumulative lead time (= purchasing plus manufacturing LT) Forecasting module Sales module
AG Barr Meas 4 © The Delos Partnership 2003 Forecast Accuracy Report – by Tolerance Forecast Accuracy = 3/7 = 42 %
AG Barr Meas 5 © The Delos Partnership 2003 Forecast Accuracy Report - MAD GroupProductForecastActualError% Error Product Group A Product Product Product Total % Product Group B Product Product Product Product Total %
AG Barr Meas 6 © The Delos Partnership 2003 Forecast Accuracy Above Target
AG Barr Meas 7 © The Delos Partnership 2003 Measure the bias in Forecasts Bias is the biggest cause of either inventory or shortages Bias also causes mistrust
AG Barr Meas 8 © The Delos Partnership 2003 Forecast Quality and Bias Graph Forecasts to display Bias Bias
AG Barr Meas 9 © The Delos Partnership 2003 What to Do With the Measure Improve sales planning Improve links to customers Look at product range Review safety stocking strategy Review capacity strategy Review where to stock product
AG Barr Meas 10 © The Delos Partnership 2003 Customer Service Customer service requires measurement of a number of different factors, e.g. –On time in full –Number of complaints –Time to process enquiries and orders –Quality of deliveries - right first time
AG Barr Meas 11 © The Delos Partnership 2003 Customer Service Definition Purpose Horizon Source of Information Number of orders delivered to required date to customers premises Flexibility required to meet customer needs MTS - none MTO - product lead time Sales order entry
AG Barr Meas 12 © The Delos Partnership 2003 Customer Service Report - Against Request Date Customer Service = 2/6 = 33 %
AG Barr Meas 13 © The Delos Partnership 2003 Customer Service Report – Against Promise Date Customer Service = 6/6 =100 %
AG Barr Meas 14 © The Delos Partnership 2003 What to Do With the Measure Review promising process Review service agreements Review supply chain Look at inventory policy Review customer profile/desires Review distribution chain Review transportation policy Review manufacturing strategy Talk through with the customer
AG Barr Meas 15 © The Delos Partnership 2003 Sales Forecasting and Demand Management 1.Sales Forecasts will always be wrong 2.A Good process will help communicate the assumptions 3.Demand Management will help to lessen the effect 4.Measures will help identify where the process is wrong The fact that a forecast is wrong is no excuse for not trying to make it more accurate – Sales and marketing director
AG Barr Proc 1 © The Delos Partnership 2003 Sales Forecasting and Demand Management The process.
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11DSCI4743 Inventory Fundamentals What is inventory? –Materials & supplies that a business carries either for sale or to provide inputs to the production.
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Role of Inventory in the Supply Chain Overstocking: Amount available exceeds demand –Liquidation, Obsolescence, Holding Understocking: Demand exceeds amount.
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1 How would you define customer service? In a retail store: How long must I wait in line? If I cannot find an item, can I find a clerk who is willing to.
1 09/10 Improved right first time measures for BT Group For lead to cash we have to do all these to get it ‘right first time’ We deliver the entire service.
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