1. QAD Demand Management 2011 Fall CAUG Session Lance LaCross, CPA, CPIM
QAD Solutions Consultant
October 9, 2011

2. Agenda Forecasting Goals Solution Overview Demand Management V6.1
2011 Fall CAUG Session
Agenda
Forecasting Goals
What & When Do we Need It?
Solution Overview
Basic Forecasting
Demand Management
Demand Management V6.1
Components & New Features
Summary

3. Forecasting Definition
Fall 2011 CAUG Session
Forecasting Definition
Comprised of Two Words
Fore
Casting
Look Out
Throw Out

4. Value Chain Demand Chain Supply Chain Value Chain Purchasing
Manufacturing
Distribution
Demand Chain
Marketing
Sales
Services

5. Balance – Supply vs. Demand
Demand Options:
Supply Options:
Manufacture Order
Purchase Order
DRP Order
Customer Orders
Forecast

6. Statistical Probability
Example - Dice In A Craps Game

7. Audience Questions How are you forecasting today? How many SKUs?
Excel?
3rd Party Package?
Crystal Ball?
How many SKUs?
What does your product hierarchy look like?
What is your input to the forecast?
Do you conduct a formal Sales & Operations Planning Meeting?
What type of adjustments are made?

8. Demand Forecasting Goals
Understanding and predicting customer demand is vital to manufacturers and distributors to avoid stock-outs and maintain adequate inventory levels. While forecasts are never perfect, they are necessary to prepare for actual demand. In order to maintain an optimized inventory and effective supply chain, accurate demand forecasts are imperative.
Similar to a dice game - to win you want to minimize the probability of inaccurate data used to drive your organization

9. Typical Demand Forecasting Goals
Reduce forecast error
At SKU Level
More time spent in analysis versus hunting for issues
Exception based
Provide an easy, consistent method for capturing inputs to the forecast
Know accuracy by sources of input
Capture thoughts on adjustments
Use the forecast and customer orders to drive planning

10. Sample Requirements Twelve to Eighteen Month Visibility
More Process Automation
Takes 10 hours to compile data to get to the sales staff and Export to Excel.
Ability to Handle Growth
What happens if we double our business?
Getting forecasts from new acquisitions?
What if we decide to drive MRP with forecast?
It has to be easy enough for the sales force to use and provide input.

11. QAD Basic Forecasting

12. QAD Basic Forecasting

13. QAD Basic Forecasting

14. QAD Basic Forecasting

15. QAD Demand Management – Tool To Help With Your Navigation

16. Demand Management Defined
Extensive statistical forecasting based on history, forecast, or other data series
Alerts to notify of exceptional circumstances
Inventory policies based on forecast variability and service level
Collaborative forecasting between suppliers and customers
Sales and Operations Planning
“…actively managing demand signals to better sense demand (think of monitoring consumption instead of orders), [and] incorporating downstream data with a higher frequency of modeling (weekly or daily)”
-- Source: AMR

17. QAD’s Demand-Driven Suite
Demand Management Engine
Collaborative Portal
Inventory Optimization
Rough-cut Planning
Sales & Operations Planning

18. Demand Management

19. QAD’s Demand Driven Suite
Informal
ERP
Excel
SQL
Access
Collaborative Portal
QAD
Other ERP
SCM BI
S&OP
Inventory Optimization
Demand Management Engine
Rough
Cut

20. Sales & Operations Planning
Demand Planners
Sales & Marketing
Category Management
Product Management
Demand
Forecast Demand
Executive Review
Resolve Issues
Set Direction
Determine Strategic Impact
Consensus
Supply Chain
Operations
Engineering
Logistics
Supply
Forecast Supply
Actual Results
Reviewed & Analyzed
Re-Forecast &
Consensus Meeting
Executive Review Meeting

21. Assisting the Supply Chain
Forecasting
Communicating
Life Cycle Management
Optimizing
Balancing
Planning
Measuring

22. Forecasting Robust statistical engine Error tracking Allocation
EDI, POS, and on-line data
Planning bills

23. Forecast Maintenance Daily, Weekly, Quarterly, Monthly Buckets
Forecasting horizon is user defined
Forecast can be shipment, order history, etc.
Unlimited years of history
32 forecasting algorithms with best fit, and on screen alerts, and 26 accuracy measurements

24. Statistics, Methods & Techniques

25. Forecast Maintenance - Demand Management
Graphical & tabular display
When insufficient history, uses variety of modeling approaches
Forecast is user defined with hierarchy created.
Change forecast through drag & drop, mass changes, tabular change
Notes with capability

26. Hierarchies Hierarchies are used to:
View data at aggregate levels such as Product Class, Sales Region, or Customer
Reconcile changes made at various levels
Provide history to create statistical forecasts at aggregate level
FORECAST
Product Type
Product Group
Division
Tools
Hand Tools
Wrenches
Hammers
Power Tools
Table Saws

27. SUPPLY-SIDE HIERARCHY DEMAND-SIDE HIERARCHY
Hierarchies
Top Down
Bottom Up
Middle Out
PRODUCT
CUST
DIST CENTER
FAMILY
SBU
SUPPLY-SIDE HIERARCHY
PRODUCT
CUST
DIST CENTER
FAMILY
MARKET
DEMAND-SIDE HIERARCHY

28. QAD Demand Management

29. ERP DM Integration
Demand Management
QAD

30. Communicating Share information Exceptions Promotions or events
Reporting
Security

31. Life Cycle Management Specific calculations Profiles Cloning/same as
Like New Items
Cloning/same as
Collaborate

32. Optimizing Optimize: Safety Stocks Service Levels Order Points
Periods of Coverage
Lead Times

33. Balancing Balance Supply & Demand through key resources
Equipment
Raw Materials
Labor
Subcontracting
What-if Analysis

34. Planning Link medium to long term operations
Business goals
Operational planning
Financial planning
Model effect on supply capabilities and financials

35. Measuring Improved visibility Enhanced decision making
Reporting and analysis capabilities for all levels of the enterprise.

36. DME 6.1 Overview Demand Management Engine DME Admin Tool
New user interface
Filters and Exceptions
Hierarchy Manager
Profile/Lifecycle Forecasting
Event Manager
DME Admin Tool
New features, better control, greater flexibility relative to Base Unit
Improved Planning Portal for collaboration

37. DME Viewer – New User Interface

38. DME Viewer

39. Hierarchy

40. Profiles

41. Custom Task Manager

42. Conversions

43. Conversion Groups

44. Notes

45. DM Engine, Admin Tool & Batch Scheduler
DME Admin
Batch Scheduler

46. Views Available Multi Series View Series Information Graph View
Data View

47. Graph Filters

48. Filter Management

49. Exceptions Used in the DM Viewer to limit series displayed
Selects series with observation data that meets a defined criteria
Example: Find SKU’s with unusual growth
identify SKU’s with no sales for 6 months
identify large user adjustments

50. Exceptions

51. Data Permission & Domains
Permits system administrator to restrict access to information by job function or individual
Sales reps for Customer X could be limited to only view the historical sales and forecasts for their customer
Regional Marketing Managers could be limited to view and adjust promotional information in their regions only 51

52. Events
Events are special situations or actions that can change forecasting behavior
Examples of Events:
Sales promotion expected to drive volume up 20% for a month
Store closing for remodeling will result in selling 20,000 less units over a two month range
New contract ensures the sale of 10,000 units over the next four months

53. Event Manager

54. Procast = “Best Fit”
Method used to select the “best fit” time series forecasting techniques
Judged to be one of the most accurate in the world
There are over 30 other forecasting methods available including:
Slow Moving Item
Exponential Smoothing
Regression
New Product
Lifecycle

55. Lifecycle Forecasting
Create forecasts without demand history based on where a product is in its lifecycle
Introduction
Growth
Maturity
Decline
Product Life Cycle Stages
Volume
Time

56. New Report Viewer New Report Viewer for DM 6.1
Template reports can be modified or new ones can be created:
Budget Variance, Lag Analysis, Margin Summary, Workflow Status, Notes/Adjustments and more
Easy integration with Excel

57. Standard Forecast Reports

58. User Defined Reports

59. Comparison Excel Output

60. Planning Portal
Provides the foundation for collaboration with key supply chain stakeholders
Sales
Marketing
Customers
Data
Intranet/
internet
Database Server
Windows 2000/2003 Server
SQL 2005/2008/2010
Web Server
Windows 2000/2003 Server
IIS 5.1/6.0
Client
(Windows 2000/XP/7
IE 6/7/8/9)

61. DME Overview – Planning Portal
PP Admin Tool

62. Demonstration

63. Summary More sophisticated forecasting techniques
Forecast collaboration tool
Changes to forecast easily uploaded
Measure Actual to Forecast accuracy
Exceptions and Filters
Document reasons for forecast adjustments
At series level or individual observations
Aggregate Forecasts different views
Hierarchy Manager
Help with setting safety stock levels
Rough Cut Capacity Planning
Planning for projected warehouse requirements

64. QAD Demand Management Thank You For Attending
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