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"At NCP we have a lot of data that allows us to do scientific and quantitative analyses, which are important to our forecasts. But it also is an art in the sense that assumptions always come into play and you can't have good assumptions without input from all of the critical groups on your team," Schleicher says.
NCP does not forecast product sales. Rather, it forecasts replenishment needs for its 100,000 member panel of consumers that report their purchases and complete opinion surveys, enabling NCP to establish reliable consumer data. NCP's forecast may be used, for example, to determine how many recruitment vendors it needs to employ to find new panelists, Schleicher says.
"In our case our product is our panel, which is made up of people with varying motivations for joining. We really need a good understanding of what motivates them so we can help keep panelists active as long as possible. The attraction may be the points they earn that can be redeemed for gifts or the sweepstakes that we run or they may simply want to have their voices heard."
While its business is not typical, NCP still relies on quantitative methods and statistical modeling to forecast replenishment needs, just as manufacturers do, Schleicher says. "One thing we have learned is that cross-functional capabilities are critical in terms of generating accurate forecasts. Otherwise, the process can look like a dysfunctional family with one party, such as the supply chain, having one forecast number and another, such as finance or sales, having a very different number. If there is no process for these to come together, it can be very difficult for an organization to achieve its goals," he says. Also critical to success is support from senior managers, says Schleicher. "Having support from above helps ensure that everyone is accountable and sharing same goals."
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Keywords: Supply chain, supply chain management, supply management, supply chain management scm, value chain, supply chain solutions, supply chain planning, supply chain systems
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