Typical problems in Sales

forecasting and customer service

Chapter - 14

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 There are a few typical problem usually occur in Sales Forecasting
Potential Problem Analysis needed

▪Low accuracy of sales forecasts ▪Real sales vs. sales plan (for SKU)

▪ Low stability of sales plans, frequent changes ▪% of coverage by sales plan real sales (i.e. for customers)
▪Sales planning process analysis (who, when, input data etc.)
Creating the
sales forecast /
plan ▪Low level of detail planning ▪Number and scale of plan corrections a month/week
▪Level of detail planning vs. procurement/production needs

▪Short planning horizon ▪ Sales planning horizon vs. production planning horizon
vs. „lead time” and stock management model

▪Not optimal customer service process

▪Time of accepting orders („panic orders”) ▪Analysis of customer service process (process mapping)
✓Logistics parameters (orders scale, delivery ✓Number of orders accepted in particular hours / time of day
time) ✓ Average scale of deliveries (total and for SKU), time of filling
Receiving and
✓Time of passing orders to its execution the orders
managing the ✓Time of accepting order vs. time of passing the order
orders ✓Analysis of sales within a month

▪Unstable inflow of orders during the month ▪Analysis of sales by weeks

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Introduction to Production
Planning

84
In production planning you have to decide how to organize
production so that it is optimal not only from the point of view
of production but the whole supply chain 85
In this section you will learn 3 things

Goal of production Production Planning value

Typical problems in
planning drivers Production Planning

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Goals of Production Planning

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The primary goals of Production Planning is to efficiently produce,
with low inventory and providing at the same time on time delivery

▪On time delivery

▪Delivery according
High to the order
Customer
Service

Efficiency Low
of production inventory

▪High utilization ▪WIP

of machines ▪Finished Goods
▪Smooth production ▪Raw Materials
▪Low costs

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Production Planning Value
Drivers

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 Several drivers related to production planning have impacts on value
generation

Driver Impact on

▪ Machine efficiency, throughput,

Allocation of products to
waste level
machines/ production routes

▪ WIP level, lead time, efficiency of

Batch size machines, waste level

▪ Waste level, efficiency of

Production planning
Batch order machines (set up time), lead time

▪Delivery time, throughput, costs

Machine utilization

▪ Delivery time, throughput, waste

Variability level

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Typical problems in Production
Planning

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 There are a few typical problem usually occur in production planning
Potential Problem Analysis needed

▪ Production planning process not linked with ▪ Analysis of production planning process (process mapping)
sales planning process

Production
planning vs ▪ Low stability of production plans ▪ Number and scale of plan corrections a month / week
sales planning
process ▪ Short planning horizon ▪ Production planning horizon vs. „lead time” and stock management
model

▪ Production planning does not take into account
machine park abilities, production plan does not
optimize OEE, i.e.:
✓Short production batches
✓Frequent setups / losses of raw materials
✓Products not ascribed to machines on which
their production is optimal
Production
planning vs
production
▪ Analysis of the logic behind planning model used (production for
warehouses vs. production as a realization of orders)
▪Analysis of production planning efficiency (impact on OEE):
✓Analysis of planned downtime (frequency and length of setups)
✓Analysis of production batches length in comparison with optimal
batches length and scale of orders / sale in regarded period
✓Analysis of the level of shortages on different production lines / for
different length of production batches

▪ Real production differs from production plans ▪ Real production vs. production plan

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