QAD Demand Management Lance LaCross, CPA, CPIM QAD Solutions
Consultant October 9, 2011 2011 Fall CAUG Session
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2 Forecasting Goals -What & When Do we Need It? Solution
Overview -Basic Forecasting -Demand Management Demand Management
V6.1 -Components & New Features Summary Agenda 2011 Fall CAUG
Session
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3 Comprised of Two Words -Fore -Casting Forecasting Definition
Fall 2011 CAUG Session Look Out Throw Out
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4 Value Chain
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5 Balance Supply vs. Demand Demand Options: Supply Options:
Manufacture Order Purchase OrderDRP Order Customer
OrdersForecast
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6 Example - Dice In A Craps Game Statistical Probability
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7 How are you forecasting today? -Excel? -3rd Party Package?
-Crystal Ball? How many SKUs? What does your product hierarchy look
like? What is your input to the forecast? Do you conduct a formal
Sales & Operations Planning Meeting? What type of adjustments
are made? Audience Questions
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8 Understanding and predicting customer demand is vital to
manufacturers and distributors to avoid stock-outs and maintain
adequate inventory levels. While forecasts are never perfect, they
are necessary to prepare for actual demand. In order to maintain an
optimized inventory and effective supply chain, accurate demand
forecasts are imperative. Similar to a dice game - to win you want
to minimize the probability of inaccurate data used to drive your
organization Demand Forecasting Goals
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9 Reduce forecast error -At SKU Level More time spent in
analysis versus hunting for issues -Exception based Provide an
easy, consistent method for capturing inputs to the forecast -Know
accuracy by sources of input -Capture thoughts on adjustments Use
the forecast and customer orders to drive planning Typical Demand
Forecasting Goals
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10 Twelve to Eighteen Month Visibility More Process Automation
-Takes 10 hours to compile data to get to the sales staff and
Export to Excel. Ability to Handle Growth -What happens if we
double our business? -Getting forecasts from new acquisitions?
-What if we decide to drive MRP with forecast? It has to be easy
enough for the sales force to use and provide input. Sample
Requirements
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11 QAD Basic Forecasting
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12 QAD Basic Forecasting
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13 QAD Basic Forecasting
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14 QAD Basic Forecasting
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15 QAD Demand Management Tool To Help With Your Navigation
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16 Demand Management: -Extensive statistical forecasting based
on history, forecast, or other data series -Alerts to notify of
exceptional circumstances -Inventory policies based on forecast
variability and service level -Collaborative forecasting between
suppliers and customers -Sales and Operations Planning actively
managing demand signals to better sense demand (think of monitoring
consumption instead of orders), [and] incorporating downstream data
with a higher frequency of modeling (weekly or daily) -- Source:
AMR Demand Management Defined
21 Forecasting Communicating Life Cycle Management Optimizing
Balancing Planning Measuring Assisting the Supply Chain
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22 Robust statistical engine Error tracking Allocation EDI,
POS, and on-line data Planning bills Forecasting
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23 Daily, Weekly, Quarterly, Monthly Buckets Forecasting
horizon is user defined Forecast can be shipment, order history,
etc. Unlimited years of history 32 forecasting algorithms with best
fit, email and on screen alerts, and 26 accuracy measurements
Forecast Maintenance
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24 Statistics, Methods & Techniques
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25 Graphical & tabular display When insufficient history,
uses variety of modeling approaches Forecast is user defined with
hierarchy created. Change forecast through drag & drop, mass
changes, tabular change Notes with email capability Forecast
Maintenance - Demand Management
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Hierarchies Hierarchies are used to: -View data at aggregate
levels such as Product Class, Sales Region, or Customer -Reconcile
changes made at various levels -Provide history to create
statistical forecasts at aggregate level Product Type Product Group
Division Tools Hand Tools WrenchesHammers Power Tools Table
Saws
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27 Top Down Bottom Up Middle Out Hierarchies PRODUCT CUST DIST
CENTER FAMILY MARKET DEMAND-SIDE HIERARCHY PRODUCT CUST DIST CENTER
PRODUCT DIST CENTER PRODUCT FAMILY SBU SUPPLY-SIDE HIERARCHY
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28 QAD Demand Management
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29 Demand Management Forecast QAD Sales History ERP DM
Integration
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30 Share information Exceptions Promotions or events Reporting
Security Communicating
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31 Specific calculations Profiles - Like New Items Cloning/same
as Collaborate Life Cycle Management
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32 Optimize: Safety Stocks Service Levels Order Points Periods
of Coverage Lead Times Optimizing
34 Link medium to long term operations -Business goals
-Operational planning -Financial planning Model effect on supply
capabilities and financials Planning
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35 Improved visibility Enhanced decision making Reporting and
analysis capabilities for all levels of the enterprise.
Measuring
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DME 6.1 Overview Demand Management Engine -New user interface
-Filters and Exceptions -Hierarchy Manager -Profile/Lifecycle
Forecasting -Event Manager DME Admin Tool -New features, better
control, greater flexibility relative to Base Unit Improved
Planning Portal for collaboration
Views Available Multi Series View Graph View Data View Series
Information
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Graph Filters
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Filter Management
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Exceptions Used in the DM Viewer to limit series displayed
Selects series with observation data that meets a defined criteria
-Example: Find SKUs with unusual growth -identify SKUs with no
sales for 6 months -identify large user adjustments
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Exceptions
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Data Permission & Domains Permits system administrator to
restrict access to information by job function or individual -Sales
reps for Customer X could be limited to only view the historical
sales and forecasts for their customer -Regional Marketing Managers
could be limited to view and adjust promotional information in
their regions only
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Events Events are special situations or actions that can change
forecasting behavior Examples of Events: -Sales promotion expected
to drive volume up 20% for a month -Store closing for remodeling
will result in selling 20,000 less units over a two month range
-New contract ensures the sale of 10,000 units over the next four
months
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Event Manager
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Procast = Best Fit Method used to select the best fit time
series forecasting techniques Judged to be one of the most accurate
in the world There are over 30 other forecasting methods available
including: -Slow Moving Item -Exponential Smoothing -Regression
-New Product -Lifecycle
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Lifecycle Forecasting Create forecasts without demand history
based on where a product is in its lifecycle Introduction Growth
MaturityDecline Volume Time
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New Report Viewer New Report Viewer for DM 6.1 Template reports
can be modified or new ones can be created: -Budget Variance, Lag
Analysis, Margin Summary, Workflow Status, Notes/Adjustments and
more Easy integration with Excel
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Standard Forecast Reports
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58 User Defined Reports
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59 Comparison Excel Output
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Provides the foundation for collaboration with key supply chain
stakeholders -Sales -Marketing -Customers Planning Portal Database
Server Windows 2000/2003 Server SQL 2005/2008/2010 Web Server
Windows 2000/2003 Server IIS 5.1/6.0 Data Client (Windows 2000/XP/7
IE 6/7/8/9) Intranet/ internet
63 More sophisticated forecasting techniques Forecast
collaboration tool Changes to forecast easily uploaded Measure
Actual to Forecast accuracy -Exceptions and Filters Document
reasons for forecast adjustments -At series level or individual
observations Aggregate Forecasts different views -Hierarchy Manager
Help with setting safety stock levels Rough Cut Capacity Planning
-Planning for projected warehouse requirements Summary
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64 QAD Demand Management Thank You For Attending! Please Fill
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