Module 3 - Section A: Demand Management Flashcards
Demand Management
-function of recognizing all demands for goods/services to support marketplace
-involves prioritizing demand when supply is lacking
-proper demand management facilitates planning and use of resources for profitabe business results
-major source of input to both strategic planning and priority planning
-information is used to plan efficient physical distribution of outbound products based on promised dates of delivery, timing of inventory restocking, and shipments between plants
Trend Forecasting Models
-methods for forecasting sales data when a definite upward or downward pattern exists
-models include double exponential smoothing, regression, and triple smoothing
Demand Management Inputs
- customer pipeline information (prospective customers at various stages of sales cycle)
- customer information, including customer segment, purchase history, detailed product mix history, open orders, feedback
- internal demand (e.g. from R & D, trade shows, etc.)
- demand from subsidiaries and other business units
- demand from supply chain for replenishment
- external market info e.g. 3rd party industry analysis, data on competitor results, leading/lagging indictory from government stats.
CRM software can be used to secure more accurate insights into current needs/preference vs. relying on historical data and projections
Customer Relationship Management (CRM)
-marketing philosophy based on putting the customer first
-involves collection and analysis of information designed for sales and marketing decision support to understand/support existing/potential customer needs
-includes account management, catalog and order entry, payment processing, credits and adjustments, etc.
-main focus is formation of relationships with customers with intention of improving satisfaction and maximizing profits
Customer Service Life Cycle
-model that describes the customer relationship as having 4 phases: requirements, acquisition, owernship and retirement
-everything viewed through eyes of customer not supplier, but as customer progresses from phase to phase, level of service supplier provides adjusts accordingly
Value Perspective
-holds that quality must be judged, in part, by how well the characteristics of a particular product or service align with the needs of a specific
Consuming the Forecast
-process of reducing forecast by customer orders or other types of actual demands as they are received
-the adjustments yield the value of remaining forecast for each period
-ability to adjust forecast consumption
Order Fulfillment Lead Time
-average amount of time between customer’s order and customer’s receipt of delivery, this include every manufacturing or processing step in between
Available-to-Promise (ATP)
-1 of 2 types of order promising
-a way for orgs to provide a response to customer order inquiries
-in cases of MTS, orgs need to allocate the inventory for an order and calculate the delivery lead time
-in cases of MTO, orgs need to determine production lead time based on a schedule within the range of usable parts, materials, and resources to determine ATP
Capable-to-Promise (CTP)
-alternative form of ATP
-used when master production schedule for product is not able to accomodate a customer order from current or future inventory
-process of committing orders against available capacity as well as inventory
-employs finite-scheduling model of manufacturing system to determine when an item can be delivered
-objective is to reduce time spent by production planners in expediting orders and adjusting plans because of inaccurate delivery-date promises
Abnormal Demand
-demand in any period that is outside the limits established by management policy
-this demand may come from a new customer or from existing customers whose demand is increasing or decreasing
-concern for orgs because it has not been forecasted
-1st task is to check ATP data to see if order can be accomodated before making any commitment to customer, next is to determine impact of fulfilling this order on other customers’ orders
-is order financially attractive?
-does it represent a nonrecurring demand
-are customer’s order quantity and due date flexible?
-not all extraordinary requests are classified as abnormal demand e.g. large volume of spart parts orders or replacement of items broken
Stockout Probability
-probability of not having a stockout in any one ordering cycle, which begins at the time an order is placed and ends when the goods are placed in stock
Customer Satisfaction
-results of delivering good or service that meets customer requirements
-most common tool to measure this is surveys (poor return rate) or customer loyalty
Customer Service Level
-measure of delivery performance of finished goods or other cargo, usually expressed as percentage
-level of service and organizational commitment to attaining that service level varies by segment e.g. % of orders sent on or before promised delivery date may be higher for customers in the strategic importance segment
Plan-do-check-action model
-4 step process for quality improvement
Plan: plan to effect improvement is developed
Do: plan carried out, preferably on small scale
Check: effects of plan are observed
Action: results are studied to determine what was learned and what can be predicted
