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tools to support the more sophisticated anddemanding business environment. Werecognized this back at corporateheadquarters. But, we did not bave accessto all of the information necessary todevelop accurate and detailed forecasts.So, a team concept was developed. Wewould lead and administer the process fromcorporate headquarters, but the actualforecast numbers for key accounts and keyproduct groups would be provided' by the

) regional or district sales offices. The ideamade sense, everyone thought it was greatbut none of the individuals from the salesorganization were knocldng down our doorsaying that they had a lifelong dream tobecome a part-time sales forecaster. Noone called or asked how they could help.So, as was so often the case in the earlydays, a reluctant "volunteer" was identifiedin each sales office to provide support. Ofcourse, these new responsibilities were inaddition to everything else they were doing.So, we had some very real concerns about

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the attention to detail that our forecastingprocess was going to receive.

To address this issue, as well as toobtain support and understandingthroughout the organization, we put severalprograms in place. We set up rewards andrecognition programs for the teammembers. (These folks were primarily fromthe sales organization, and as such werevery competitive. We tried to use this toour advantage .) We established andcommunicated detailed weekly performance metrics. We took every opportunityto speak to the sales organization to helpthem better understand the importance offorecasting to the bottom line. Once theybegan to understand the relationshipbetween the accuracy of the forecast andoperations' efficiency and the company'scheckbook, the support and focus increasedsignificantly. Weekly SKU/DC averageerror rates were reduced from near 40% toaround 20%. The team had done its job!

_..... . ~ : . .__._ .(See Chart 1)WHATHAVEYOUDONEFORMELATELY?

That was then and this is now. Ourworld has changed. The business hasgrown. Traditional supply chain tradeoffsthat existed in the past are no longeravailable for quick and easy gains . As anexan1ple, companies often would make anincreased investment in inventory tosupport higher service levels. Guess what?Our shareholders wontallow us to do thattoday. They want a higher return oninvested capital and world-class customerservice. Something had to give!

There is an often true but humorousaxiom associated with softwareimplementation projects that goes asfollows: "We can do things three ways:Good, Fast and Cheap; pick two!" For toomany years, in too many industries that

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CHART2DEMAND PLANNING, MASTER PLANNING, SCHEDULING AND EXECUTION

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was the way the supply chain was viewed .Today, more has changed than just thepolitical correctness of these terms. Nowwe need to deliver with the "HighestQuality, Quickf.v, and at the Lmvest TotalCost" with very few exceptions. Meetingthis new axiom is the cost of entry intotoday's demanding and dynamic

MasterProdur.tiiHlPl:m

Production.. --

Replenisltlllent

- Imarketplace. Excellence in manufacturing.procurement and distribution alone willnot deliver the expected results to thebottom line if we are manufacturing ,procuring and distributing the wrongproducts.

) marketplace.

actually coined it first bu t whoever did hitthe money on the head. Major process andorganizational redesign -of ten a radicalon e - is necessary to deliver the superiorsupply chain performance required today .An effective combination of People,Process and Tools is necessary toconsistently deliver world-class results .Unlike the implementation axiommentioned above, you can'texcel in one ortwo of these and forget the third . All threemust be in place to produce sustainableresults . The focus needs to be on total andfully integrated Supply Chain Execution,not just a great forecast or world-classmanufacturing or logistics.

THE BASIS OF AN IMPROVEDPROCESSIS INTEGRATED SUPPLY CHAIN

PLANNING THE ANSWER?A significant burden has been placed

on the Supply Chain Planning Departmentin our organization. A frequently repeatedphrase, "In the future, companies andproducts won't compete but supply chainswill" is only too true! I have heard thisstatement attributed to several differentpeople and groups. I am not certain who

The framework for our supply chainplanning project (Chart 2) is the underlyingbelief that this process must begin with animproved demand signal from the

An improved process is based on asound understanding of existing processes.During the Design Phase of our project,several months were dedicated todeveloping and documenting, in detail,ou r various supply chain planningprocesses .l t was critical that we understoodeach process, the inputs and outputs andwhere the responsibility for was located inthe organization. Once the processes werewell understood and documented, sessions

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were held to analyze our capabilities vis-avis the requirements of the businessorganization and entrenched industry BestPractices. Once completed, we had a soundunderstanding of our "As Is" and "To Be"world.

Key process and responsibilitychanges that were identified as part of thedesign phase of the Demand Planningportion of the project included thefollowings:1. A shift to a centralized management of

more sophisticated forecasting modelsthat better represented the complexnature of our business.

2. A more efficient process for the fiel