Demand Planning and Forecasting with POS Data: A Case Study

deMAnd PLAnnInG And FOreCAsTInG wITH POs dATA: A CAse sTUdy By Fred Andres T T he retailer is the final frontier of supply chain planning. So, it is important for manufacturers to have a serious look at what is happening at the retail outlet level because that is where there is an interface with a real customer. If your customer does not get the products it wants, in the package it wants, and in the stores where they are needed, then your entire supply chain has failed. The most common shortcoming of retail execution is high levels of stock outs. Numerous studies by organizations like the Grocery Manufacturers Association and the National Association of Convenience Stores over the past 10 years have shown that the average manufacturer faces an out of stock rate of 6% to 8%, a number that can reach as high as 12% during price promotions. The data that is needed for supply chain planning at the retail level is the actual sales to consumers at each retail outlet, which is called Point of Sale (POS) data. Twenty years ago, collecting all the POS data a manufacturer needed was extremely expensive, because it meant getting a massive amount of data from hundreds and thousands ...