Expert Insight: Guest Contribution

By Karin Bursa,
Vice President Marketing,

Logility, Inc.

Date: December 3, 2009

Time to Enhance Demand Planning is Now


The Need For A Synchronized Demand-Driven Supply Chain Becomes Even More Critical

In a dynamic economy, the need for a synchronized demand-driven supply chain becomes even more critical. Although it is a natural reaction to pull back to just the basics for survival in the current global economy, smart companies will be more strategic by investing in their supply chains to improve business processes and leverage technology. Especially in a recession, you must be able to respond quickly to dynamic demand and provide consistently high in-stock service and on-time deliveries. By focusing on SCM initiatives that increase demand visibility, companies can more accurately forecast demand, efficiently deliver finished goods, and consistently meet customer service goals with less inventory and higher profits.

Boost Visibility With The Right Demand Planning Solution


The correlation between profitability and the ability to effectively manage supply and demand is clear. Research indicates that one week’s inventory advantage translates into a 1% cost advantage—giving you a competitive advantage that can be measured by lower costs, better product availability and improved profitability. This means gaining demand visibility and creating a supply chain network that can quickly and flexibly meet rapidly changing market demand should be a top priority. To become more demand-driven, better demand visibility can be generated combining multiple demand signals, including forecasts, actual consumption data, syndicated industry data, and collaborative planning between supplier and customer.

Demand planning solutions such as Logility Voyager Solutions™ can give your entire supply chain access to critical and accurate demand visibility and provide the foundation for sales and operations planning (S&OP). Leveraging a portfolio of forecasting models to automatically generate forecasts at multiple business levels, from sales and marketing to logistics to financial, you can boost service levels, shorten cycle times, reduce inventory investment and minimize obsolescence.

Visibility And Accuracy Lead To Dramatic Improvements


Lance, Inc., one of the largest producers and distributers of well-known snack food brands, implemented Logility Voyager Solutions and put a demand planning process in place with three objectives in mind: improve forecast accuracy, reduce days-on-hand inventory and streamline the executive S&OP process. Lance knew that more accurate forecasts would lead to meeting the company’s goals of reducing working capital, improving operational efficiencies, increasing freshness at the shelf and optimizing inventory investments.

With Logility, Lance’s forecast accuracy increased from 50% to an impressive 70%, a figure which is considered best-in-class in the snack food industry. Better demand visibility has also led to a significant reduction in days-on-hand inventory (a critical measurement in the perishable food market), and a streamlined S&OP process has driven numerous additional benefits across the business.

The success of every company depends on its ability to profitably meet customer demand.

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Bursa Says:

The success of every company depends on its ability to profitably meet customer demand.

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