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Splitting the Demand/Forecast

Posted on Jan 03, 2007 at 10:25 AM 209 Views

Hi All,

This one is more on the functional side. When a periodic or monthly demand (the level at which forecast is already calculated) is say split into weekly buckets- how does the supplies (fill rate) behave in both these cases assuming that there is certain level of batch/lot sizing that happens at production.

- Equally Split say. weeks demand = (Mthly demand/No of days in the mth)x 7

- Split based on the interweek sales ratio historically.

Though as planner, there were some incentives to do the later more from a rationing point of view in the event of short/non supply. but in a pure make to stock scenario inventories are in any case sufficienctly made available for shipping, i mean there is no "Pull Based"or "just in time" happening when it comes to replenishing stocks at point of sale. Shipments are made as per product availability plan and entire stocks are made available by the rqmt date (say BOW or EOW). So basically by splitting demand i am splitting the shipments as well (as per PR's created) by creating a large number of PR's with uneconomical shipment sizes. !!

or does this practice of splitting advisable from a lean organization point of view. (Pls. assume pure make to stock scenarios only). and hence helps phase the supplies evenly .. Is it desired at all.as there will be incentives to bundle the shipments which are phased..

Your opinions pls,.

Rgds/

Loknath

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    author's profile photo Former Member
    Former Member
    Posted on Jan 03, 2007 at 08:19 PM
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    Hi Lokenath,

    If it is a functional solution you are looking for, the first info required is what industry vertical you are working for? What are the products that you are planning for? What planning process do you use? etc

    Generally:

    1. Smaller bucket size are ideal where due date is important and the optimum lot size is small.

    2. Shipment size can be optimized by using multiple batches of different products, and can be defined in the TLs.

    3. Even if it is a made to stock situation, its never advisable to produce in lagre quantities.

    4. The objective of low storage costs and adhearance to delivery date remains even if your shelf life is high and cost of product is low.

    I am not sure if this helps but you can always take a lead from these. Also you can reply with details and Ill try to give a more definitive answer.

    Regards

    Santanu

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    • Former Member Former Member
      Jan 09, 2007 at 05:02 AM

      That would be good shantanu.

      My present state of knowledge is a potent combination of SCM as in business and SCM as in SAP, the latter for me being just a begining. For all i understand SAP has a medicine and logic for everything. May be the asnwers lie in Supply Planning part which i haven't gone thru yet. Anyway I thank you for your patient replies. Keep posting.

      Keep in touch.

      Thanks

      Loknath Rao

      Mumbai, India

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