Demand planning in action: 3 real-life examples

Demand planning can sometimes seem like a fruitless exercise. Forecasts frequently miss the mark. And then companies are left scrambling when a stockout is imminent and their best-laid demand plans need to be scrapped. Yet if you’re serious about thriving in today’s hyper-competitive, increasingly-volatile markets, demand planning is key. Here are 3 real-life examples where having solid demand planning processes made all the difference between success and failure.

1. Improved forecast accuracy

In 2005, Tastykake was floundering. It was preparing for a major SAP implementation but had not yet settled on a formal forecasting process. It was suffering huge losses and runaway costs due to inaccurate forecasts. Equally devastating, the company’s delicious cupcakes, crumpets, and pastries were falling victim to spoilage regularly.

An improvement in forecast accuracy, however, meant that in just two years’ time, its average error rate dropped from 15% to 8%. The company was better able to plan for future demand, and as a result, it made informed decisions around staffing, optimized inventory levels, and lowered overall costs.

2. Inventory management

A fragmented process built around outdated technology meant that The Container Store struggled to decide what supplies to order and when. It also had a difficult time monitoring what was delivered from its suppliers. In short, the company had an inventory management nightmare on its hands, which lead to frequent stockouts for some products and excess inventory for others.

Implementing a demand planning solution like Atlas enabled the company to gain visibility into what was happening at a SKU-week level in stores as well as what was being delivered and when from its suppliers. Armed with concrete data, The Container Store has succeeded in streamlining its replenishment planning, thus decreasing overall inventory levels and increasing inventory turns.

3. Multi-department collaboration

After a period of explosive growth, Method Home had a problem on its hands. Admittedly, it was a good problem to have, but nevertheless, it was an issue that was hampering the company’s ability to realize its full potential. The Excel spreadsheets passed back and forth via email limited who could participate in the forecasting process and opened the company’s data up to human error.

So Method Home focused on implementing demand planning processes that emphasized automation and collaboration. Centralized record-keeping with an interface that enabled even remote employees to access the same information in real-time helped keep everyone on the same page and the data clean. As a result, the company made across-the-board improvements while maintaining a service level of 98%.

Demand planning is an essential part of every business. Doing so well requires the right mix of technology, process, and people, and this can seem like an impossible feat. Fortunately, seeming impossible and being impossible are two different things, and our Forecast Xperts are here to make sure solid demand planning solutions are within reach. Like the examples above, we’re confident that you’ll see immediate benefits.