Service Level a Priority: 81% Now Achieving 95-99% and 5% Achieving 99+%
BOSTON, Aug., 2012 /PRNewswire/ — According to the Consumer Goods Supply Chain Forecasting Survey by ToolsGroup and the Global Market Development Center (GMDC), even though two-thirds of companies in the consumer goods supply chain consider demand volatility and forecast accuracy a high businesses priority, half still rely on Excel spreadsheets for forecasting. The survey responses were gathered from a sample of GMDC members during May 2012.
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There was also clear survey evidence of a corporate focus on achieving high service levels and fill rates. A full 58 percent of respondents identified these Key Performance Indicators (KPIs) as high priority. Eighty-one percent of respondents say they now achieve 95-99 percent service levels based on fill rates or in-stock at the shelf and 5 percent are topping 99 percent levels.
The survey identified a distinct difference between companies’ priorities and the relatively simple systems they are still deploying. For instance, while 74 percent of respondents would find it helpful to develop a bottom-up forecast (SKU-Location) by key customer and leverage point-of-sale (POS) data, more than half don’t have a forecast system in place to plan collaboratively with their partners, beyond home-grown Excel-based solutions.
The survey also confirmed the importance of trade promotions to supply chain planning. Forty-one percent of the survey respondents reported that at least one-third of their volume is driven through advertising and trade promotions, which directly impact baseline forecasts.
“Most consumer goods companies’ supply chain needs are too challenging today for them to be able to see and forecast supply chain activity using only Excel,” commented Pat Smith, General Manager – North America, ToolsGroup. “Spreadsheets are simply not powerful enough to be able to analyze data and achieve today’s more aggressive supply chain planning goals.”
“With so many economic variables outside people’s direct control, the best news from the survey is that there are specific actions that companies in the consumer goods supply chain can take today, like modernizing their forecasting tools, to improve their ability to raise profitability and service levels,” says Mark Deuschle, Chief Marketing Officer at GMDC.
The Global Market Development Center (GMDC) is the premier global trade association that promotes critical connectivity to grow and expand member companies by uniting members through business building events and opportunities and enriching their thinking through education and training; consumer and business insights; and information resources. For more information, please visit www.gmdc.org.
ToolsGroup (www.toolsgroup.com) is a global provider of Powerfully Simple supply chain planning software. Powerful behind-the-screen engines enable highly intelligent data-driven decision making. Reliable and scalable statistical models are continuously and automatically tuned to automate and simplify the planning and control process. Our customers overcome volatile supply chains to generate accurate forecasts and outstanding customer-service levels with less global inventory. ToolsGroup’s solutions span key supply chain planning areas such as Demand Planning, S&OP, Demand Sensing, Promotion Forecasting and Multi-Echelon Inventory Optimization.