At the IBF conference last month in Scottsdale Arizona, there were many interesting presentations and discussions regarding new product forecasting. While the organizations were discrete, ranging from children’s clothing to pharmaceuticals, the challenges remain quite similar. If accurate forecasting of new products is essential to a company’s growth and profitability, why is it so difficult?
Product forecasting is difficult, new product forecasting is even more difficult. Forecasting is tedious, time consuming, and error prone. However, new product forecasting can be very rewarding, because a large portion of sales comes from new products. The forecast is never 100% right, but it is possible to build a solid forecast and that is accomplished through integration and collaboration.
Steve Tribou, VP of Sales Forecasting and Planning at Carter’s/Oshkosh discussed how the development of “Account Plan Quantification” helped bring an analytical perspective and ultimately facilitate a more collaborative process. Steve’s narrative of events that took place prior to a more collaborative process appears to be very common amongst organizations.
Planning is hard, everything is constantly changing, and it is not as easy as developing the plan and executing to it. In the planning process we must deal with all of the interim change and therein lies some of the chaos we encounter. In an effort to achieve improved business results, we must focus on continuous alignment, realignment and synchronization.
For simplicity, although this is not a simple or linear process, let’s break this down into 3 stages. In his presentation, Steve acknowledged the presence of similar activities in the pre and post collaboration stages as well.
The pre-collaboration stage could be described as a bit chaotic. There was disconnect in the communication – in fact there were various methods of communications. Has anyone ever experienced this when attempting a seasonal planning session? Along with various methods of communication comes varying opinions. There is generally not a lack of people or opinions; it is generally a lack of the right actions. The move from pre-collaboration stage to collaboration is a journey and is often marked with some very tough discussions, distrust and challenging obligations.
The Transition Phase
We all know the difficulty of change should never be underestimated. For any process change to be effective there needs to be adoption across the organization. Generally, we see some early adopters, the meetings start to get interesting, the curiosity factor heightens, and there is movement. There is oftentimes a lot of “push -pull” in the organization. It is during this time where the journey begins to take shape.
This stage is where the process begins to grow and mature. Trust, which is an essential component, begins to build in and across various business units. A cadence starts to kick in and while this can be very subtle, it is increasingly felt within the organization and is ultimately manifested in an improved forecast. It must be noted a collaborative process requires continuous improvement and is therefore a continuous journey.
Implementing any collaborative process can be likened to Tuckman’s 4 stages of group development, Forming, Storming, Norming and Performing. The challenges are similar regardless of the industry or the size of the organization. The complexities however, do scale with size and with the degree of integration within the organization. In my own prior experience, I was part of a large national retail corporation that went from a fully decentralized inventory management process to a centralized process. This was a huge undertaking that took nearly 6 years to complete. Much like the presenter commented at the IBF Conference, the initial period presented major challenges and very difficult conversations. This is all a part of progress.
Supply Chain Leader