One of my rights of passage as a kid during this time of year was a trip to a Haunted House. To this day I love a good haunted house. It provides the opportunity to forecast what will pop up where and when. What room has the chainsaw, when will the plastic skeleton pop up, and how awful are the sound FX and music as I wander into the spooky dark places. Funny how quickly I can connect with the scary things that happen to companies using old (legacy) Demand Forecasting & Replenishment software that had core development more than 5 years ago. With a consultant brought in who cannot even explain the differences between demand and sales forecasting; you have a really scary (expensive) house of horror. A current event highlights new markets are being created in days and your legacy software was never designed to meet the scenarios we are faced with in our supply chain all the time now. The Ken Bone costume that was born from a presidential debate in a matter of hours. While your demand forecasting has no way to predict this event, how many of you have custom alerts in your system that you can use to highlight specific events and business rules?
Can Your Demand Forecasting and Inventory Replenishment System Handle a Ken Bone Scenario?
How fast does your business move? The Ken Bone costume that was born from 2nd Presidential Debate in matter of hours. Ken Bone, an ordinary man, rose to stardom by asking a question at a debate. It is hard to believe the same man could be a top Halloween Costume of 2016. Within 36 hours, e-tailers were selling and shipping Ken Bone Sexy Costumes for $99.99 and Regular Ken Bone Costumes for $49.99. For those who like to save money, retailers are stocking his sweater, glasses, and fake mustache. The age of your Demand Forecasting and Inventory Replenishment System will determine how well you handle Omni-Channel Situations like these. Does your legacy software use Lost Sales in your reforecast algorithm OR do lost sales just show in a report and create a manual action? Trust me in 90% of the systems, the lost sales is just a KPI.
Lost Sales Is Scary on the Bottom Line
It is important to have Demand Forecasting/ Inventory Replenishment software that can handle Omni-Channel retailing challenges like Ken Bone Situation. If you do not make a change from your Legacy Software, one of the scary results can be lost sales.
Lost Sales in Legacy Software is Scary When It Involves Demand Forecasting and Inventory Replenishment
Most Legacy Software lacks the tools to change quickly to meet fast changing market conditions that spin in hours not weeks. Demand Forecasting and Inventory Replenishment Legacy Software is any software that base code was designed over 5 years ago. When this code was written, it was not written to solve the complex retail problems that face our supply chains today. Think about the lost sales scenario, if you manually need to touch anything with a lost sales, you have lost critical time. Modern systems like Data Profits actually calculate the lost sales and load that data into the demand forecasting module. Our users do not need to manually touch everything that lost sales, why would they? If you knew it was out of stock, you need the system to not lower the forecast because sales were lower due to outs. Note to self- that’s a key way to identify sales versus demand forecasting software. You cannot create updates to fix legacy software, think about it, if the core forecasting math needs a different data input, then everything that uses that forecast will need an change in software code – expensive and impractical – scary right?!
Selecting New Demand Forecasting/ Software Provider Can be Frightening
Be very afraid if new provider cannot explain the Difference between Demand Forecasting and Sales Forecasting. Read this Blog to use as a guide. It is important to select a provider that simplifies process and does not frighten you to buy by confusing you. Please Contact Us if you have any questions.