Approaches to Demand Planning Using Point of Sales Data

apprOaCHeS TO DeMaND pLaNNiNG USiNG pOiNT OF SaLeS DaTa By Kai Trepte T T he supplier’s scorecard makes or breaks a product’s position on the store shelves. To ensure top performance, suppliers have spent millions of dollars on forecasting and planning systems over the past five years. Unfortunately, a recent study by the Grocery Manufacturers Association shows that forecast accuracy has remained flat during this time. In order to meet retailer requirements, suppliers have to increase inventories or face significant compliance charges. With all of these factors coming into play, suppliers are beginning to look for breakthrough approaches to improve forecast accuracy. In many cases, the problem stems from the fact that suppliers have not adopted a consumer-centric approach to planning. Retailers have been providing Point of Sales (“POS”) data to their suppliers for many years. One of the greatest challenges facing suppliers is that traditional planning systems are not well suited to support the use of such data. As a result, suppliers have not embraced the use of POS data within their planning processes. Since forecast accuracy has not improved over the last five years, the ...