Tim Bauer’s Running Thoughts

Here is an example of a bad egg (webcast) focusing on how Cole Industries moved to a forecasting solution over 2002 to 2004. Demand planning solutions is always of interest in the manufacturing space (BI/Tech riddle) so it seemed to be something worthy of looking into.

Unfortunately the webcast was too slow, too little critical thinking about what they did and how it translates to the audience, etc. So, I wouldn’t rate it too high. However, I did hear two notables:

1. Good Case Study: Cole Industries is a good example for manufacturers that are considering how they focus more on their retail (or partner) channels. In effect, pondering how to begin to behave more like a retailer and less like a mfg.
2. Good Baseline: For the layman it is a very detailed, entry level discussion of drivers around replenishment and demand planning drivers.

If you are interested here is the link:

WEBLINK

I also uploaded the associated white paper … Synchronizing Store-DC/Warehouse … let me know if you have thoughts.

*** RAW NOTES ***
Synch Store / WHSE DemandJohn Broemman - Cole - Sr Dir IT
Gene Alvarez - VP Tech Research / Sales Strat - META
Bob Stoffko - Cole - Dir DW & Fin SysSlide 1 - META
…………○ Economic Uncertainty = Inventory Uncertainty
…………○ Predict spending demand
…………○ Move from supply to demand focus
…………○ “Sense & Reply” environment
• Slide 4 - CPG View of Demand (cg company/retailer)
…………○ Each link in supply chain adds safety stock to the true end customer demand … which drives need to see the end need throughout the chain (Collaborative Demand Planning)
• Slide 5 - Understanding Customer Demand
…………○ Engage / Transact / Fulfill is the chain META talks to
…………○ Need multiple views of demand
• Slide 6 -
…………○ Discuss variables that drive customer demand patterns. Behaviors, placement, regional demographics, etc
…………○ Shipping information is being used as a parm for demand models but it shouldn’t be
• Slide 7 -
…………○ Demand response cycle shortens to 1wk by 2010 (per META) … versus 6 months in 1995 or 1 month today. This is supported by Dell, for example, investing in their MFG plant agility (build to order in days). Not a one size meets all but you get the jist.
…………○ RFID could play a role in early communication from customer end of demand chain … sense capability … change mix upstream since there could be days just in shipping time starting in end mfg (stop or start)
• Slide 8
…………○ Shipping forecasting is only for transportation .. Not for demand
…………○ Don’t do demand forecast w/ one or two variables (like promotions, product, location, season, demographics, trend, weather patterns, etc)
…………○ Focus on ship levels could create service level illusions (sell out in wk1, 100% service level, but if you cant ship by wk2 … you miss 1 wk of demand … even though svc level stays @ 100% … if you focus on shipments … you might believe you are meeting demand … so you need to see demand at a lower granularity (days) which then impacts turns, lift and out of stock metrics
• SKIP to slide 14 (too slow) - COLE SEGMENT
…………○ Cole National -
……………………§ Cole Managed Visions (PBM)
……………………§ Things Remembered (Retail)
……………………§ Retail Optical - Vision providers primarily (sears, target, bj’s, pearle, cole managed vision). Started making keys.
…………○ Why did they invest — Shift from MFG to RETAILER (and what does that mean)
……………………§ Why shift? If they didn’t sell well their MFG capability and associated stats (turns, out of stock, etc) would be underperform
…………○ Guiding Principles
……………………§ Common Solution for all business lines.
……………………§ Single version of report truth.
……………………§ Best of Breed Solutions (not 1 ERP)
……………………§ Pkg focus (no mods)
…………○ Core Business Impacts and Benefits
……………………§ Lab Replenishment was focus … nice detail slide (but not covered)
……………………§ Teradata DCM solution was picked and Microstrategy … and JDA for retail Item Hierarchy
…………○ Slide 25 - Nice roadmap … showing how 3 pieces above (DCM etc) rolled out
…………○ DCM Overview
……………………§ Contribution Analysis (units, $, GM $)
……………………§ Seasonal Profile
……………………§ Rate of Sale (Weekly Demand Rate)
……………………§ Forecasting and Replenishment