Benchmarking Demand Management Practices in Consumer Industries

Figure 4: Frequency of Consensus Forecasting Process

Technologies like pattern recognition, and predictive analytics and simulation are emerging to support more frequent forecasting processes.

The biggest challenge in achieving faster frequencies of consensus forecasts is the number of participants involved in this activity (Figure 5). As can be seen, there is a need to incorporate the inputs from a wide variety of roles. This is the reason why interdisciplinary teams are widely regarded as the most-effective approach towards creating a consensus forecast.

Figure 5: Roles Involved in Consensus Forecasting Process

Interdisciplinary Demand Management Teams

As Table 1 indicates, only about 19 percent of consumer industry companies have interdisciplinary sales, marketing and operations teams that determine the best demand plan that synchronizes with the supply chain. Consumer packaged goods companies are most likely to have these teams while consumer durable goods are least likely.

Table 1: Interdisciplinary Teams for Demand Management (Source: AberdeenGroup, December 2006)

Aberdeen research, however, finds that simply having these interdisciplinary teams is not enough. These teams need to be supplemented with technology enablers and enhanced use of demand-related data. Best-in-class companies are winning because of their ability to leverage both process and technology to achieve the best demand management solution.

* Aberdeen's definition of consumer industries included the following: Apparel/Footwear, Consumer Durable Goods, Consumer Electronics, Consumer Packaged Goods, Distribution and Wholesale, Food/ Beverage, Health and Beauty Aides, and Pharmaceutical Manufacturing (OTC drugs).

About the Author: Nari Viswanathan is research director in Aberdeen Group's Supply Chain & Logistics Practice. Viswanathan specializes in order-to-delivery and sales and operations planning processes. For more about this report and demand management practices at enterprises, please go to ">Demand Management in Consumer Industries."