Forecasting and Demand Planning Overview

Forecasting and Demand Planning

• Forecasting is the process of predicting future values of one or more variables.
• Qualitative forecasting uses market research and customer feedback.
• Quantitative forecasting uses historical data, trends, and seasonal patterns.
• Time-series analysis focuses on patterns in historical data.
• Causal forecasting considers external factors like economic conditions.
• Planning horizon is the timeframe of a forecast.
• Time bucket is the unit of measure for a forecast period.
• Time series shows observations at successive points or periods.
• Time series characteristics include trends, seasonality, cyclical patterns, and random variation.
• Forecast error is the difference between observed and forecasted values.
• Demand planning analyzes and manages demand forecasts to optimize supply chains.
• Demand planning goals include improving forecast accuracy, optimizing inventory, reducing overstocking, enhancing supply chain efficiency, and improving customer satisfaction.
• Demand planning benefits include improved forecast accuracy, lower inventory costs, flexible supply chains, better decision-making, and higher customer satisfaction.

Enterprise Resource Planning (ERP)

• ERP is software that automates and integrates business processes across departments.
• ERP examples include Cogsy, Kinaxis, Rapid Response, Atlas Planning Platform, Oracle Cloud Supply Chain Planning, and Pecan AI.

Capacity Management

• Capacity management is the planning, monitoring, and controlling of an organization's resources to meet changing demands.
• Capacity management aims to use resources efficiently in response to changing demands.

Inventory Management

• Inventory management plans, coordinates, and controls the acquisition, storage, and distribution of inventory to meet customer needs.
• Key inventory aspects include the number of items and time periods, lead time, and stockouts.
• Key inventory activities include forecasting demand, setting inventory levels, managing replenishment, tracking inventory, optimizing inventory allocation, and monitoring levels.
• Inventory types include raw materials, components, work-in-progress (WIP), finished goods, maintenance, repair, and operations (MRO), and seasonal inventory.
• Inventory management techniques include Just-in-Time (JIT), Economic Order Quantity (EOQ), reorder point (ROP), material requirements planning (MRP), vendor-managed inventory (VMI), and drop shipping.

Total Quality Management (TQM)

• TQM integrates all organizational functions and processes to ensure continuous improvement in the quality of goods and services for customer satisfaction.
• Key features of TQM include cultural change, enabling mechanisms, and implementation steps.
• Cultural change focuses on meeting customer requirements, embracing continuous improvement, and encouraging employee involvement and teamwork.
• Enabling mechanisms include training and education, effective communication, recognition, and feedback, and a supportive environment for continuous quality improvements.
• Implementation steps include defining the organization's mission, identifying customer needs, developing specifications to meet objectives, and establishing activities to meet customer goals.
• Quality pioneers and their frameworks include Deming's 14 points, Juran's 10 steps to quality improvement, and Crosby's 14 steps to quality.
• TQM principles include emphasis on customer-centric approaches, continuous improvement, and strategic planning, using structured methodologies and statistical tools.