Tracking KPIs is essential to manage supply chains, but incentivizing individuals based on metrics can backfire. This article provides historical examples and supply chain cases where incentives created issues such as diminished motivation, unethical behaviors, or even exacerbated the very problems they aimed to solve. We advise balancing intrinsic and extrinsic motivators, carefully implementing rewards, and avoiding penalties. Follow best practices to optimize performance, not metrics.

This article explores the risks of using inadequate KPIs for supply chain management. Starting with stories from the trenches, we structure the pitfalls (narrow focus, reduced collaboration, misalignment with business goals, and lack of ownership and accountability) and propose best practices to mitigate them (finding the right tradeoff between specific and holistic KPIs while selecting the correct number of metrics to alleviate narrow focus).

With advancements in technology and data analytics, demand forecasting is experiencing a significant transformation. The traditional, widely used approach of first segmenting products and then applying distinct forecasting techniques to each segment may no longer be the most effective or accurate method. This article first discusses the drawbacks of employing segmentation, then navigates towards alternatives (optimization engines and machine learning) that promise substantial enhancements to your forecasting strategy.

This article is a comprehensive guide to managing sales outliers. It begins by dissecting the root causes of outliers in sales order data. Then, it proceeds to critique the limitations of conventional outlier management methods. More importantly, our guide introduces our unique approach to addressing outliers: a dual solution centered on identifying and removing erroneous data while integrating business drivers into our predictive model.

This article explores one of the most challenging problems in supply chain management: forecasting intermittent demand. We first delve into the intricacies and root causes of erratic sales patterns. Then, we critically examine traditional forecasting methods (Croston) and metrics (MAPE or WMAPE), highlighting their limitations in the face of unpredictability. Ultimately, we propose strategies that will enhance your forecasting accuracy amid demand volatility and provide tactics to optimize your supply chain for increased resilience to intermittent orders.

This article presents a clear step-by-step approach to reducing your forecasting by up to 35%: collect and clean your data, use machine learning, and enrich your forecasts using the forecast value added framework. — Poor forecasts result in excess inventory, obsolete products, inappropriate long-term capacity planning, supplier tensions, shortages, and emergency expeditions. In short, they harm profitability, frustrate your teams, and waste resources. On the other hand, accurate forecasts will allow you to produce more effectively the required products, ship them on time where…

This article tackles the challenge of forecasting new products. First, we divide product introductions into three cases: new version, line extension, and brand-new products. Then propose methods to forecast demand in each case. — Businesses like to renew their product portfolio by releasing new versions of existing products or launching brand-new products. By providing new value propositions for consumers, companies hope to increase (or secure) market share and enjoy overall sales and profit growth. Unfortunately, forecasting new products is especially challenging for demand planners…

Developing a supply chain strategy supporting the company’s objectives is a prerequisite for effective S&OP. This article discusses how to create an effective supply chain strategy by defining the company’s competitive strategy, identifying Critical Success Factors (CSF), and defining Service Level Agreements (SLA). — Effective Supply Chain management is essential for companies to remain competitive and profitable in today’s fast-paced and dynamic business environment. A key element of successful supply chain management is to develop and implement supply chain strategies that align with the company’s overall objectives. A well-defined Supply Chain Strategy is a…

How much savings will we achieve if we improve forecasting accuracy by 10%? Supply Chain VPs around the world. Improving forecasting accuracy should help your inventory quality: you will have a better idea of what, when, and how much to produce. Ultimately, better forecasts mean higher service levels, lower inventory…