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November 15, 2013 - Supply Chain Flagship Newsletter

This Week in SCDigest

bullet Understanding the Role of the Demand Planner
bullet SC Digest On-Target e-Magazine
bullet Supply Chain Graphic of the Week bullet Holste's Blog/Distribution Digest
bullet New Cartoon Caption Contest Starts This Week bullet Trivia      bullet Feedback
bullet Supply Chain By Design and New Expert Insight bullet Videocasts/On Demand Videocasts

Vendor Performance Videocasts Spring 2013, WebEDI, Retail Supply Chain Special Reports and more

  first thought


Supply Chain Graphic of the Week:

Where do Companies Stand On Key Supply Chain Initiatives?

Philips Trims the Fat in Procurement
bullet Deliveries Now Open on Sunday
Rail Carriers Riding Profit Tracks Big Time
Our Supply Chain Video Timeline is Very Popular



November 12, 2013 Contest

See The Full-Sized Cartoon and Send In Your Entry Today!

Holste's Blog: How Important Is Achieving ROI?


Weekly On-Target Newsletter:
November 13, 2013 Edition

New Cartoon, Amazon Makes More News, Rail Q3 Review, Understand New JDA and more

7th Annual Gartner-SCDigest

Supply Chain Study

Complimentary Gartner Research for All Respondents to this 10-Minute Survey - a $500 Value!

The Impact of Natural Gas Trucks On Your Supply Chain Design and Capabilities

By Dr. Michael Watson

The Adoption of Voice Technology Is All About Improving the Bottom Line

By Scott Deutsch
Director, Global Marketing
Vocollect by Honeywell


The term "Lean" as a shortcut for the Toyota Production System is generally recognized to have been coined in what year?

Answer Found at the Bottom of the Page

Understanding the Role of the Demand Planner

Is there any more mysterious role in the supply chain than that of the demand planner?

Why do I say this? For a couple of reasons, I submit.

First, as I have heard many companies say, the numbers a demand planner cranks out in terms of forecasts can often commit a company to millions of dollars in inventory or capacity, yet the position is often not treated with a level of respect or analysis commensurate with that responsibility and consequence.


"Clearly in the consumer goods and retail sectors, as we move to forecasting each SKU at a store level, the number of DFUs per planner will explode."


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Relatedly, the type of person hired for demand planning and how that role fits into a career path is quite varied. I was at meeting two year ago where this very topic was discussed by a group of consumer goods and retail companies, and the practices in this regard were all over the map.

For example, some companies relied heavily on new hires out of college to fill junior demand planning roles, a position for which if a demand planner was any good was just a stop on a journey to something better in the supply chain.

Others mostly hired experienced demand planners from other companies, and someone could build a nice career within the demand planning team itself. And every combination in between.

Another topic is how demand planners interact with the rest of the organization. At the recent CSCMP conference, Tony Nikolai of Whirlpool gave an excellent presentation on "getting the politics out of Sales and Operations Planning," which included a process and a culture that was committed to not letting internal pressures affect the initial forecasts from the core demand planners.

Whirlpool insists on unvarnished numbers to start the process. More senior managers would then work these numbers with the business to develop a consensus (actually in Whirlpool's case, more of a range from low to high), but it had to start with the untainted facts.

So with that, I am pleased to share some of the results from our recent benchmark survey on practices and trends on the role of demand planner. I am not sure if there has ever been a study quite like this one. You can download the full report here: Demand Planner Benchmark Study 2013.

I want to thank supply chain planning software provider ToolsGroup for sponsoring this work. ToolsGroup did that really just to help move the industry's understanding of this under-studied topic forward, and I appreciate that.

We had more than 300 respondents from around the globe, led primarily by responses from US companies but a strong showing from Europe, Australia and other developed markets as weak, and then a smaller response from developing economies. So for most of the data, we broke it into North America (meaning the U S and Canada) and Europe (meaning most of Europe plus a few other countries), and in a few cases "Others" as well.

So how about the question of whether a career can be built as a demand planner or not? As can be seen below, for just over half of North American and US companies, demand planning is usually just a stepping stone to other roles in supply chain or finance.

Demand Planner Career Path at Respondent's Company

  Just under one-third of respondents in both markets said a nice career could be built in the demand planning area alone, with responses in the mid-teen percentages saying "other" (which mostly meant "it depends".)

Is the workload in terms of SKUs or DFUs (demand forecasting units  - say a product at a location, such as a distribution center) rising for demand planners? The general consensus in the industry is that it is, and our data mostly supports that, as can be seen below, About 35% and 43% of US/Canadian and Euro companies, respectively, say the number of DFUs that demand planners are managing has risen modestly over the past few years, and another 8% and 12% say that number has risen sharply.

Number of DFUs Per Demand Planner Rising Modestly


One question is whether this is in part the result of more automation from demand planning tools (allowing the system to do more of the work rather than the demand planner) or whether the reduction in relative demand planner headcount has forced greater use of automation to keep up. I believe it is a little of both. But clearly in the consumer goods and retail sectors, as we move to forecasting each SKU at a store level, the number of DFUs per planner will explode, requiring much more use of automation and then mostly handling by exception.

Finally, how do companies see their demand planning capabilities overall? The results show something pretty close to a bell curve, with right around 44% in NA and Europe saying their capabilities are average, with around 34% and 38%, respectively, believing they were above average or excellent, though not many claimed excellent status in either region.


How Effective are Demand Planning Processes and Results?


Ok, that's it. More in the full benchmark report.

On another quick note, we've now had more than 100 requests for our 50 Years of Supply Chain Progress timeline video, and managed to send most of those out. Still happy to send you one if you are interested. Send us a note at the Feedback button below.

Do you agree that demand planners are often under appreciated? Any reaction to these data points in the study? Let us know your thoughts at the Feedback section below.

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NEW Major Videocast:

Ford's New Approach to Supplier Risk Management

Auto Giant Adopts Risk Exposure Index Methodology, a Quantitative Approach to Measuring and Reducing Supply Chain Risk.

Dr. David Simchi-Levi, Professor of Engineering Systems at MIT and Michael Sanders, Purchasing Manager at Ford.

Tuesday, December 3, 2013

New On Demand Videocast:

The Impact of Vendor Performance on Retail Inventory Levels - Unlocking the Mysteries

A Detailed Look at How Reducing Vendor Lead Time and Fill Rate Variance Drives Lower Inventories and Improved Cash Flow.

Featuring Mark Krupnik of Retalon, former retail supply chain executive David Schneider, and Richard Wilhjelm of Compliance Networks.

Now Available On Demand

On Demand Videocast:

Crate and Barrel's Holistic Supply Chain and the Role of Supply Chain Visibility

Explore how the import and export operations enabled the business strategy of Crate and Barrel while focusing on cost savings.

Featuring Virginia Thompson, Senior Director of Import/Export at Crate and Barrel and Stephanie Miles, Senior Vice President of Commercial Services at Amber Road

Now Available On Demand


We received a number of nice letters on last week's Supply Chain History Project column, some just saying "great idea," others offering some history tidbits. A selection of those emails is provided below. Probably a few more next week.

That includes our Feedback of the Week from Mike Regan of TranZact Technologies, who adds some additional history relative to the first transportation Load Control Center at 3M.

Feedback of the Week, on the Supply Chain History Project


Very interesting column and idea.

You should have contacted me. I knew Roy Mayeske and another gentleman that worked for him at 3M, Larry Hall. With respect to the software, guess who owns that software today? Yours truly.

It was ultimately sold to CSC and we bought it from them in 1999. We named the product StarPlan. If I am not mistaken (and I may be),the person at Schneider who got the product going was a rising hotshot named Chris Lofgren - who is the CEO of Schneider today.

When Schneider bought us in 2000 Chris was in charge of the deal and I talked to him about this. Once again, I may be wrong, but the product was initially conceived by optimal decisions out of Cinci, Ohio and was debuted at a NITL Transcomp show.


Great thing you are doing.

Mike Regan
TranZact Technologies


Dan, suggest you connect with Cliff Lynch. He was VP Logistics at Quaker Oats in the 1970's, when I believe he sponsored the first (or at least the best at that time) Network Design project.

We used an innovative nonlinear optimizer developed at MIT for that (I was at TBS at that time...Cliff remains a good friend...and he is among the best logistics leaders ever).

This belongs in the special history...thanks.

Gene Tyndall
Tompkins International

I can't  remember what I did yesterday let alone in the 1970s.


Seriously, as Gene pointed out Quaker engaged Temple Barker & Sloane to do this network analysis in 1973. At that time I don't recall anyone else having done it, but I wouldn't stake my life on it.


It was an excellent piece of work however and gave us a network that held up against at least three more analyses while I was there.



Clifford F. Lynch
C.F. Lynch & Associates

Sounds like it was very early, but pretty sure the DelMonte project in 1972 was the first, as we showed in the timeline video.

Dan Gilmore


You seem to be focusing on modern day supply chain management. If you are going to do a history of supply chain you should at least cover the Roman Civilization’s contributions. The "all roads lead to Rome" concept allowed goods and information (via couriers)  to flow in and out of Rome's hub-based logistics control center.

An excellent book "Movable Feasts" is a good source of info on the ancient food supply chains.

Lawrence (Larry) Lapide, Ph.D.

Research Affiliate

MIT Center for Transportation & Logistics

Editor's Note:

Thanks Larry.


To be clear, the video was tied to the 50 years of CSCMP, so it would go no earlier than 1963.

The older stuff is either known or lost. I am not saying I will ignore the older stuff (we had the Ford assembly line and "Taylorism" as two of our 10 greatest supply chain innovations of all time) but I am most concerned about stuff that if it isn't captured now, will be lost (can you believe no one as a copy of Mesher's 3Vs research notes?) and putting it all in one place.

I will certainly go back a the Romans? Not sure.

Dan Gilmore


Just had the opportunity to view the video depicting milestone supply chain events during the past 50 years. What a great job. Sure, my list might be a bit different but anyone who has been around for a while could say the same.

I would like to have a copy to show some peers and those on my team.

Don Patch

Director of Global Logistics

iRobot Corporation




Q: The term "Lean" as a shortcut for the Toyota Production System is generally recognized to have been coined in what year?

A: 1988 - MIT graduate student John Krafcik used "Lean" in an article on TPS that year. The book "The Machine that Changed the World," published two years later, popularizing the term.

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