I always look forward to the IBF’s annual Consumer Products & Retail Forecasting Forum. It gives me a chance to validate the direction we are taking our own forecasting and demand planning processes. There were many different themes that came out of the IBF Conference. The one that resonated with me the most was getting closer to the customer. Anderson Cheng, Senior Demand Planner & Hannah Petru, Demand Planner both from NESTLE USA were a Dynamic Duo at the conference. They did a wonderful job in explaining the processes that they have in place to fill the gap between product shipments and product consumption. They are making great strides in moving from “Push” forecasting to into the ‘Pull” world.
The “Push” world reminds me of the North Korean guided missile program….they launch their missiles into space with a planned trajectory, but in reality have no clue where it is going? When we lack that view into the supply chain, we only see our shipments and a delayed view of consumption. Then in between, there is a big blur or black hole!
Many CPG companies have commented this year that they are feeling distribution warehouses and retail chains are backing off building inventory that they carried in the past.
In this type of economy we are seeing a reverse “bullwhip effect.” As the supply chain drains its inventory, a supplier could overreact and pull back too much.
Moving into the “Pull” world comes down to cost and benefit. How much of an investment in systems, data, and people is it going to cost the organization compared to the benefits derived from a seamless supply chain?
I am not a lazy demand planner, but I always believed that when it comes to demand planning, less is more. And pursue the next level of complexity when you are forced to due to not reaching your goals.
I think that we are all getting to the point, if we want to or not, of joining Nestles path into the ‘Pull” forecasting world.
Your comments and experience are welcome
Wells Dairy Inc