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Demand Forecast Accuracy Depends on Placing and Pacing
The CPG industry is characterized by low involvement products bought and used frequently. Because of low switching costs for the shopper, brand loyalty is fickle. If the right product is not available at the shelf, the shopper may select a competitor's product.

To ensure shelf availability, the CPG manufacturer needs to effectively execute:
1) producing the right product at the right time
2) positioning the right product at the right distribution center within its distribution network at the right time.

Subsequently, when the retailer's order is received, the product can be shipped to the retailer's DC for onward shipment to the right store for placement on the right shelf.

Thus, demand forecast plays a crucial role in ensuring shelf availability. In turn, the accuracy of demand forecast depends upon placing and pacing.

What are Placing and Pacing?

The consensus demand plan drives the CPG manufacturer's master production schedule as well as the positioning of products at various DCs. Consequently, fulfillment depends on the CPG manufacturer accurately pointing forecast to the right shipping location, which is called placing the forecast. Incorrect placing of forecast can lead to a disconnect between demand forecasting and fulfillment planning.

There is another potential disconnect between demand forecasting and fulfillment planning--time granularity. Fulfillment planning is done at a more granular level (daily) than demand forecasting (weekly). Therefore, weekly demand forecasts require...
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Sharing Analyzed Data Makes the CPG Supply Chain Consumer-Centric
The CPG supply chain frequently experiences a paradox--being swamped with data, yet lacking actionable information. Even though CPG companies have ever increasing access to demand signals from retailers, research indicates that U.S. retailers average approximately 8 percent out-of-stocks (OOS) during non-promotional periods and almost double that during promotional periods.

While some OOS issues can be addressed by increasing inventory levels, this approach can be costly and does not help the company to introduce new products that consumers desire, nor does it help to take quick corrective action when products do not perform as expected. In order to truly service consumers, CPG companies must be in constant touch with changing consumer tastes and preferences, and true consumer demand.

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CPG companies that can effectively sense true consumer demand earlier than their peers can make significant improvements in their inventory and service levels, and hence increase market share, revenues and profit margins. Research indicates that these companies have...
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Retail Solutions Releases Forecasting Application for CPG Companies
New forecasting software for consumer packaged goods (CPG) companies is now available in general release from Retail Solutions Inc. The system operates from available order, shipment and point-of-sale (POS) data to provide users with more accurate baseline order forecasts for each of retailer customers, by item and week, the vendor said. The technology is integrated with Retail Solutions Demand Signal Management, a system for sharing...
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Daily Forecasting Tool Helps P&G Improve Service, Reduce Inventory
With a portfolio of 60,000 different products in 160 countries, forecasting and replenishing are major challenges for Procter & Gamble, one of the world's leading consumer packaged goods companies. David Mills explains how P&G is using a solution from Terra Technology called Intelligent Daily Forecasting to improve product delivery to retail customers and product availability to end consumers. The better data provided by this solution also has enabled P&G to reduce its inventory by 10 percent and to free demand planners from transactional tasks so they can focus on demand-shaping opportunities....
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Wal-Mart Relaunches Its Private Label Brand Strategy
Wal-Mart is relaunching its Great Value private brand, the largest food label in the country, in an attempt to woo even more cash strapped consumers. Citing a study conducted by Gfk, a market research firm, Wal-Mart says that more consumers are switching from...
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