Dr. Chockalingam

Many planners typically boycott the Advanced Planning tool that is struggling to meet their planning needs. Their Demand Management operates in full-blown Excel mode and off-line analytics for most of their planning work – manual compilations of numbers, huge 50 MB spreadsheets and power pivots. In companies where the models and the tools are not working, Demand Management is [...]

I had a long conversation recently with the President of a CPG company on adding some form of Forecast quality as a metric for his Sales Managers. He was interested in designing a matrix of measures along with quota attainment, promotional performance and account profitability. What measures to consider? WMAPE, Bias, Simple attainment all came up. WMAPE was a [...]

Method to measure customer service The PERFECT method to measuring your customer service is to find out how your customer is measuring you. Over time organizational score cards have evolved to be negotiating tools between different functions rather than portraying the true performance of the company. Again this is due to the fact that the accountability for metrics is [...]

It is now well settled that we want to use the Weighted MAPE to measure the quality of the demand plan. This can be done in a portfolio of measures – 1. Weighted MAPE at the SKU/DC level to measure distribution planning 2. Forecast Bias to evaluate persistent forecast bias 3. Some measure of SKU-Mix Error Although most demand [...]

I am just getting ready for the Chicago trip – our annual event in Demand Planning. But this time we will be covering some new topics including some emerging trends in Demand Management. We will also look at the pot that has been muddied by SAP with its announcement of new products in Sapphire – what is new and [...]

In some recent visits, I have noticed something interesting about the KPI Reports and the calculations used. It appears that some companies report the Fill Rate or Customer Service measure more as a shipment ratio rather than as a metric to measure the customer’s pain. I see this calculated as the total quantity shipped over the month compared to [...]

Some say yes………. and some say no! There are many things questionable about Statistics and Modeling and of course, the famous or infamous, Normal Distribution. Those who question the value of forecasting invariably point out that it is gravely inaccurate (and unfortunate) to assume that your demand is normally distributed. Is Normal the tendency to be perfectly normal? Or [...]

Intermittent demand or sporadic demand is a fact of life. In many cases, demand occurs in one lump followed by periods of no demand. What drives intermittency in demand patterns? Fixed Ordering Costs Transportation Costs Purchase Quantity discounts Shoe Leather Costs…. In any case, it is important to come up with strategies to plan for intermittent demand. We typically [...]