Understanding demand, service and inventory metrics – presented by Mark Chockalingam, Ph. D.

On demand: on-site workshop at your location, or as a public training course – To schedule a customized on-site workshop, please contact us.

The objective of this workshop is to review the inter-relationship between the various supply chain metrics – customer service metrics, inventory metrics, and forecast accuracy. The workshop will also look at the mechanics behind the various metrics and how designing holistic metrics will help you to align incentives and address different behavioral biases.

You Will Learn:

  • Understand the importance of a balanced Value Chain
  • Key components of a Performance Measurement process
  • Understand the mechanics and calculation of Customer Service and Inventory Metrics including First Time Fill Rates, Order complete, Inventory Turns, and Obsolete Inventory
  • How to Measure and use forecast Metrics in improving Value Chain Performance?
  • How to understand and address organizational bias?
  • How Demand Volatility affects the behavior of Demand and Supply functions?
  • How to set up a balanced Metrics system and align Incentives

Topics Covered:

  • Value Chain Balance – Overview
  • Performance Metrics and Incentive Alignment
  • Review of Customer Service Metrics
  • Inventory Metrics
  • Forecast Performance Metrics
  • Incentive Effects of Demand Volatility
  • Goal Alignment using Metrics

Detailed Outline of the Workshop

  • Value Chain Overview

    • Value Chain Balance – Introduction
    • Demand and Supply Chain
    • How do you align the Value Chain?
    • Organization Questions
  • Inventory Metrics

    • Inventory Turns – Productivity
    • Dead and Obsolete – The Slobs
  • Value Chain Performance

    • How to Measure Value Chain Performance?
    • Customer Service Metrics
    • Cost to Serve Metrics
    • Asset Productivity Metrics
  • Effects of Demand Volatility

    • Is MAPE a questionable measure?
    • Incentivizing Demand Planners
    • Identifying forecast Bias when there is persistent volatility
    • Demand Management
  • Mechanics of Service Metrics

    • First-time Fill Rate
    • Percent Order Complete
    • The Road to 99.5%
    • Inventory and Execution Route
    • Demand Planning Excellence
  • Incentive Alignment using Metrics

    • How to measure the Demand Chain?
    • Financial Forecast versus Demand Plan
    • How to measure the Supply Chain?
    • Alternative control metrics

To schedule a customized on-site workshop, please  contact us.

You can download the presentation for Forecast Accuracy and Safety stock here:

Tracking and Measurement of Forecast Accuracy and Safety Stock PDF