Executive Briefings

Wrestling With Demand Variability in CPG

Downstream demand signals have been available in the retail world for some time now, but it has taken a while for suppliers to take full advantage of them. Mark Kremblewski, global business expert in demand planning with Procter & Gamble, likens the situation to the mining industry, which trades in deposits of both high- and low-grade ore. The latter type is more plentiful, but it's the first that offers the biggest payback from a better use of demand data in unpredictable situations.

In retail, that might be new-product introductions, which offer little in the way of historical data to guide stocking plans. To counter the shortfall, suppliers need access to consumption signals by product and location. At the same time, they need to make accurate assessments for the sell-down of older product. "They don't have the consistency of data or the ability to do that in a large-scale way today," he says.

"Low-grade ore" in retailing might be product moving in day-to-day operations. "You've got a lot of information," says Kremblewski, "but only a little bit of value across a tremendous amount of products." Still, new software systems offer the ability to more effectively mine that huge volume of information.

Both types of demand have to be monitored, says Kremblewski. But suppliers and retailers need to determine exactly what they're trying to achieve in a particular instance. Point-of-sale data is commonly available from big-box retailers in the U.S., less so in other parts of the world. "It's still very spotty," he says. "The larger [the customers] are, the more effort you're going to make to get that data."

In an ideal world, he adds, all parties in the global supply chain would be collaborating on data standards to ease collaboration. Today, however, "we have to map data with each individual customer."

The growing complexity of global supply chains "makes the utilization of downstream data all the more important," Kremblewski says.

To view video in its entirety, click here


Keywords: Retail, CPG, Forecasting & Demand Planning , Business Intelligence & Analytics, Business Process Management, Collaboration & Integration, Customer Relationship Mgmt., Event Management, Sales & Operations Planning, SC Finance & Revenue Mgmt., SC Planning & Optimization, Supply Chain Visibility, Global Supply Chain Management, Supply Chain Analysis & Consulting, HR & Labor Management, Supply Chain Security & Risk Mgmt, Business Strategy Alignment, product consumption signals, downstream data

In retail, that might be new-product introductions, which offer little in the way of historical data to guide stocking plans. To counter the shortfall, suppliers need access to consumption signals by product and location. At the same time, they need to make accurate assessments for the sell-down of older product. "They don't have the consistency of data or the ability to do that in a large-scale way today," he says.

"Low-grade ore" in retailing might be product moving in day-to-day operations. "You've got a lot of information," says Kremblewski, "but only a little bit of value across a tremendous amount of products." Still, new software systems offer the ability to more effectively mine that huge volume of information.

Both types of demand have to be monitored, says Kremblewski. But suppliers and retailers need to determine exactly what they're trying to achieve in a particular instance. Point-of-sale data is commonly available from big-box retailers in the U.S., less so in other parts of the world. "It's still very spotty," he says. "The larger [the customers] are, the more effort you're going to make to get that data."

In an ideal world, he adds, all parties in the global supply chain would be collaborating on data standards to ease collaboration. Today, however, "we have to map data with each individual customer."

The growing complexity of global supply chains "makes the utilization of downstream data all the more important," Kremblewski says.

To view video in its entirety, click here


Keywords: Retail, CPG, Forecasting & Demand Planning , Business Intelligence & Analytics, Business Process Management, Collaboration & Integration, Customer Relationship Mgmt., Event Management, Sales & Operations Planning, SC Finance & Revenue Mgmt., SC Planning & Optimization, Supply Chain Visibility, Global Supply Chain Management, Supply Chain Analysis & Consulting, HR & Labor Management, Supply Chain Security & Risk Mgmt, Business Strategy Alignment, product consumption signals, downstream data