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What are the 5 Planning Metrics Your Radar Planner Must Have?

Demand planning is a very important task in any organization, which is why planners must be attentive to the constant changes in the market, the real speed of sales and the insights they receive from the processes of the chains. of supply.

In order for the company to be at the forefront, demand planners must track key, smart indicators that are easy to interpret, save time but most importantly, assertively support decision making. These are the 5 most important planning metrics:

  1. Early warning indicators for demand variation
    The variation in demand in a ratio of +/- 15% at SKU level and product category. Factors driving demand variation need to be discussed to align the supply chain and reduce stockout or shortage scenarios.
  2. Paretos Demand Analysis
    The Paretos principle proposes that 20% of customers represents 80% of a company’s sales, which is why the demand planner must timely report any deviations that occur to mitigate the damage.
  3. Difference between sales forecast and actual sales
    The best way to keep the team aligned with the objectives is to know the current state of sales results vs. the estimated outlook.
  4. Forecast error
    This comparison should allow the drivers that lead to forecast errors or deviations to be identified by analyzing whether the market method or behaviors are altering planning.
  5. Market intelligence on competitor activities
    Knowing closely the activities that the competition is carrying out is important, which is why all forecasters must keep in mind the performance of launching new products, sustained exhaustion of the competition. Quality problems of competition or product recall.

 

** The choice of indicators to be monitored will depend mainly on the needs and nature of the business as well as on the commercial objectives pursued by the company.