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Demand Planning.Net
demand planning, forecasting, and exception management

POS Data

POS stands for Point of Sale. For CPG and technology manufacturers that compete in the retail consumer market, the sales through the cash register is an important component of the total information they need to forecast, plan and distribute their products. Most retailers make this data available to their suppliers so they can better forecast and replenish the retailer distribution centers and stores. In practice, this is achieved through the VMI relationship. So the best place to look for your sell thru data is your supply chain.

Sources of Consumption Data

The best source of consumption data is the channel closest to the consumer. Although the retailer has the cash register data, they may have difficulties organizing, analyzing and checking the veracity of the aggregated store level data. Mass retailers like Walmart and Target are exceptions. They have sophisticated retail based systems that provide the data to their supplier partners through the Walmart Retail Link and the Target Partners Online system respectively.

The solution is syndicated data. Commercially available syndicated data are the following sources:

1. AC Nielsen's

2. IRI

3. NPD etc.

Since Wal-mart and Wholesale Clubs do not provide cash register data to the Syndicated data sources, the data available from these sources are ex-Wal-Mart and Clubs. To compare it to the total channel shipments, you have to get Wal-Mart and Clubs POS data directly from the retailers and add it to the Syndicated universe.

Setting up a data warehouse to extract, clean, aggregate and load the POS data from different sources has become very important for manufacturers in the recent years given the vital importance of this data both in market planning as well as in supply chain forecasting. We have seen some classic database systems and data models used by some companies. However, this is a very challenging endeavor and needs expertise and knowledge of both the data as well as systems to develop this database.

Coverage Factors

The Syndicated data covers most of the shipping universe however sales from small mom-and-pop stores and beach side stores are not tracked largely due to the difficulty in tracking down the cash register data from these outlets. The data providers usually estimate a factor for these using shipments versus consumption over a number of years. Hence this is really a derived estimate and a certain sense of business judgment is required to to use this factor.

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