Two Questions: Apo Demand Management

[Former Member]

We are currently attempt to gauge demand by previous invoices. I am crusading for using Sales Orders instead - as this is the way I have always understood to initially create a sales forecast.

1. Can anyone offer the Pros and Cons of using invoices versus Sales Orders

2. We have a batch job that runs every night and send invoices to APO. Can anyone offer any experience based on including sales orders to this interface - how difficult to include Sales Orders in the interface? Is it a different SAP program batch job that can send the sales orders?

Thanks, Tom Matys

[Former Member · Accepted solution]

Tom,

????  Pretty odd that you would 'crusade' for something, when you don't know the pros or cons.  Remember, the goal of forecasting is telling the future.  No matter what method you choose, the resultant forecast will ALWAYS be wrong to some extent.  For me, I would be asking myself if the costs of converting a forecasting method could ever be recouped by the business benefit of a POSSIBLE increase in forecast accuracy.

Forecasting by Invoice lets you plan your future business based on what happened in the past.

Forecasting by Sales allows you to plan your future business based on what could have happened in the past.

Example:  Last January, I invoiced 1000 widgets.  Customers had ordered 2000 widgets to be delivered in January, but I did not have enough stock/capacity to ship and build these in January, so I shipped and invoiced the balance in February and March instead..

Both are valid models, depending upon the market you serve and the strategy you wish to pursue. It does not have to be 'either/or'; some companies consider both key figures before arriving at their final demand plan.

Obtaining data about sales requires just about the same amount of work as it takes to obtain data about invoices. Any competent BW consultant can set this up for you..

Best Regards,

DB49