Dr. Chockalingam

The denominator for WMAPE is passionately argued by many- should it be actual demand or forecasted demand? For starters, if the forecast error is small the denominator does not matter in the final metric. When you observe more uncertainty, the denominator plays a factor and your WMAPE can be significantly differ owing to the denominator. Simple argument made by [...]

Is your organization ready for IBP? How do we know that we are implementing this nifty solution that could NOT be used if the process and people are not ready? There could be a variety of parameters that could counter IBP readiness: 1. Lack of a process vision can make the IBP tool an expensive typewriter. 2. The Excel [...]

SAP IBP defines additional metrics to evaluate the forecast quality of the statistical forecasts compared to what we had in SAP APO. The biggest improvement in IBP Demand is addressing the MAPE. A flawed metric that calculated infinite MAPEs when you have zero demand for one month. IBP introduces the WMAPE Weighted Mean Absolute Percent Error weighs the [...]

For the following scenario which of the following historical orders data stream you would consider from a demand planning perspective? 1. All order streams A to E should be considered? 2. Only relevant order streams coming from customers – B and E should be considered? 3. Only the Orders placed on plant (A and C) should be considered? Which would be [...]

Some planners just are very proud of the fact that their business is complex – 20K SKUs, 20 DCs and thousands of customer sold-to locations. And when my team at Demand Planning LLC start mining the data, we find that invariably a good fraction of the SKUs never sold a single unit (or pound or kg or ounce) in [...]

What is the big fuss about Trade with China? In 2017 we imported $500B worth of products exported about $125B. Here is a trend of Trade deficits over the last 15 years. Yes our Trade Deficits have increased with China. The Chinese diligently supply us with inexpensive products and gadgets and earn USD as foreign currency which they invest [...]

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 [...]

Demand Planning LLC has done some extensive research on modeling capabilities in the IBP Demand solution launched by SAP.  And we are the leading authority on Model Tuning and Optimization in the current SAP SCM tool that is also known as APO – Advanced Planner and Optimizer.  We have done re-implementations of SCM for several companies to leverage the use [...]

Should we create Customer-specific SKUs to reserve inventory for our best customers?  In many instances, I have heard this client question – our best customers who give us great demand visibility often get shorted because another customer who provides erratic forecasts comes in and wipes out the inventory. What should we do? Smart customers have moved in the direction of requiring [...]