Case Study

 Creating operating rules for a logistics org. 

Identifying critical policy gaps and rapidly developing standardized management controls in a supply chain organization

A large supply chain organization lacking in demand planning expertise struggled to build reliable forecasts. The organization used a generalist model for employees, which inhibited the development of demand planning proficiency. There was also a lack of clear guidance and standardization for the demand planning processes, creating gaps in areas including portfolio segmentation, data preparation, and forecast model selection. Skill gaps and lack of process guidance, resulted in widespread inaccuracies in forecasts. WP&C led an enterprise-wide effort to reposition the organization for long-term functional excellence. Throughout the implementation process, we collaborated extensively with the organization’s leadership and subject matter experts, ensuring they were set up for success going forward. We helped the organization:

  • Realign its operating model to facilitate the development of functional expertise
  • Stand up Centers of Excellence for demand planning
  • Develop a cohesive demand planning policy along with supporting training materials
  • Perform advanced analytics to support the implementation of new portfolio segmentation guidance, data structuring, and purpose-built forecasting software

Employee skill gaps stemming from a generalist model, a lack of process guidance and standardization, and poor data quality across the portfolio made effective demand planning very challenging. This client employed large numbers of generalists who conducted demand planning along with several other supply chain functions. This model inhibited the focus and skill development of employees in any of these functions. Many employees lacked understanding of forecasting fundamentals and common models offered by commercial software.

Due to the heightened risk of demand planning error from the lack of training, employees were restricted from using all but the most basic forecasting model. While the basic forecasting model was fundamentally sound, it did not adequately account for the complex situations found across the product portfolio. Additionally, the portfolio lacked a clear or well-maintained SKU segmentation approach to support tailored forecasting methods. 

WP&C developed a holistic approach to address deficiencies in demand planning, recognizing that isolated interventions would be insufficient without accounting for interconnected organizational factors. Our approach focused on four main areas:

  1. Operating Model
    Redesign the operating model to establish functionally specific teams and roles capable of developing deep expertise in demand planning
  2. Process Excellence
    Develop best practices for standard guidance on the use of forecasting models and adjustments to minimize process complexity; support training that enables process excellence and domain knowledge
  3. Data Integrity
    Align data integrity elements—data definitions, approach to portfolio segmentation by planning methodology, and data governance—to ensure everyone is aligned and making decisions based on trusted, consistent data
  4. Technology
    Leverage technology by integrating commercial forecasting software and developing custom tools and dashboards to support process management and ad hoc analytics

WP&C made six action-focused recommendations to improve demand forecasting effectiveness:

  1. Stand up Centers of Excellence for demand planning and other supply chain functions to enable the development of domain expertise
    We conducted extensive assessments of the client’s needs and designed a structure suited to their unique situation.
  2. Prepare employees for their new roles by providing courses of instruction for those involved in demand planning
    We developed curricula and training materials, and conducted multiple rounds of training courses for the organization’s employees.
  3. Implement a system to prioritize how frequently each SKU requires forecasting
    After performing deep analysis, we provided a system that segmented SKUs both categorically (active, terminal, vendor-managed, not stocked, etc.) and, within the “active” category, quantitatively by demand variance and demand intermittency.
  4. Implement standardized process guidance on subjects including setting the demand base, selecting the “best fit” forecasting model, and applying adjustments
    We provided the organization with proposed policies on each topic, based on industry best practices and how these apply to the organization’s specific situation.
  5. Implement commercial forecasting software into demand planning operations
    We provided specific requirements, customizations, and implementation support for forecasting software and related custom tools and dashboards.
  6. Clean and standardize SKU data
    We created a bespoke plan to conduct data cleanup and helped develop data governance policies that would ensure data will be maintained long term in a standard, useful condition.

Case Study Image 1

 

The organization was able to move from non-standard processes and unreliable forecasting outcomes to a system with effective management controls that ensure forecast adjustments are structured and justified. WP&C’s holistic approach fostered collaboration across supply chain activities and domains, addressing forecasting challenges from multiple angles.

The organization now operates with:

  • Functional Centers of Excellence which foster deep skill development
  • Standardized process guidance which has reduced process complexity and variation
  • A data management plan that facilitates advanced analytics and improved forecasting results

Results:

  • Over 100,000 SKUs are properly defined and segmented
  • 100+ generalist employees were trained as demand planners
  • Multiple distinct software packages support demand analysis and planning

Employee skill gaps stemming from a generalist model, a lack of process guidance and standardization, and poor data quality across the portfolio made effective demand planning very challenging. This client employed large numbers of generalists who conducted demand planning along with several other supply chain functions. This model inhibited the focus and skill development of employees in any of these functions. Many employees lacked understanding of forecasting fundamentals and common models offered by commercial software.

Due to the heightened risk of demand planning error from the lack of training, employees were restricted from using all but the most basic forecasting model. While the basic forecasting model was fundamentally sound, it did not adequately account for the complex situations found across the product portfolio. Additionally, the portfolio lacked a clear or well-maintained SKU segmentation approach to support tailored forecasting methods. 

WP&C developed a holistic approach to address deficiencies in demand planning, recognizing that isolated interventions would be insufficient without accounting for interconnected organizational factors. Our approach focused on four main areas:

  1. Operating Model
    Redesign the operating model to establish functionally specific teams and roles capable of developing deep expertise in demand planning
  2. Process Excellence
    Develop best practices for standard guidance on the use of forecasting models and adjustments to minimize process complexity; support training that enables process excellence and domain knowledge
  3. Data Integrity
    Align data integrity elements—data definitions, approach to portfolio segmentation by planning methodology, and data governance—to ensure everyone is aligned and making decisions based on trusted, consistent data
  4. Technology
    Leverage technology by integrating commercial forecasting software and developing custom tools and dashboards to support process management and ad hoc analytics

WP&C made six action-focused recommendations to improve demand forecasting effectiveness:

  1. Stand up Centers of Excellence for demand planning and other supply chain functions to enable the development of domain expertise
    We conducted extensive assessments of the client’s needs and designed a structure suited to their unique situation.
  2. Prepare employees for their new roles by providing courses of instruction for those involved in demand planning
    We developed curricula and training materials, and conducted multiple rounds of training courses for the organization’s employees.
  3. Implement a system to prioritize how frequently each SKU requires forecasting
    After performing deep analysis, we provided a system that segmented SKUs both categorically (active, terminal, vendor-managed, not stocked, etc.) and, within the “active” category, quantitatively by demand variance and demand intermittency.
  4. Implement standardized process guidance on subjects including setting the demand base, selecting the “best fit” forecasting model, and applying adjustments
    We provided the organization with proposed policies on each topic, based on industry best practices and how these apply to the organization’s specific situation.
  5. Implement commercial forecasting software into demand planning operations
    We provided specific requirements, customizations, and implementation support for forecasting software and related custom tools and dashboards.
  6. Clean and standardize SKU data
    We created a bespoke plan to conduct data cleanup and helped develop data governance policies that would ensure data will be maintained long term in a standard, useful condition.

Case Study Image 1

 

The organization was able to move from non-standard processes and unreliable forecasting outcomes to a system with effective management controls that ensure forecast adjustments are structured and justified. WP&C’s holistic approach fostered collaboration across supply chain activities and domains, addressing forecasting challenges from multiple angles.

The organization now operates with:

  • Functional Centers of Excellence which foster deep skill development
  • Standardized process guidance which has reduced process complexity and variation
  • A data management plan that facilitates advanced analytics and improved forecasting results

Results:

  • Over 100,000 SKUs are properly defined and segmented
  • 100+ generalist employees were trained as demand planners
  • Multiple distinct software packages support demand analysis and planning

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