Don't be a victim!
A 3 year contract for a software as a service platform - what!?!?!
Yes, can you believe that? While working with a client recently, I learned that one of their cloud based technology providers was requiring they sign a 3 year contract for services. My immediate thought was that's absolutely nuts! Why would a provider force a customer to take on a 3 year contract for something that is a subscription which the customer does not own. I assumed that it was because there was a discount being offered, if the customer signs up for an extended term - which is the only reasonable consideration to offer a long term agreement. However, that was not the case. It was simply the providers way of doing business and to their credit they could sell it; largely because their prospects still believe purchasing any business software is like purchasing an ERP system.
This is what makes DemandCaster unique and is our key differentiator. Our view on this is simple...we do not believe in long term agreements for software as a service - period. We could require such agreements and receive them, but it is simply against our core principles and company values. Any provider that forces their customers to take on a long term agreement is still clinging to the old mentality to "Sell it and then charge a maintenance fee" paradigm. A three year or any other long term agreement is nothing more than dropping the upfront cost to purchase software and treating the software like a lease. The difference being, unlike a car or equipment lease, there is no depreciation because the user is not purchasing a software version that they may upgrade at some later time for an additional cost. Software as a service (SaaS) means that the customer pays a periodic fee for the opportunity to access the technology and will enjoy the benefits of updates and improvements on an ongoing basis.
Our view is that as a provider of any service that values customers and strives to provide the best service possible, trapping a customer in a long term agreement is unnecessary. The focus should be on securing a long term relationship through great service and a constant desire to drive value. If you are not able to provide the value to justify your cost then it should be no surprise if a customer decides to cease using your services. Additionally, a lot can change in three years. If a customer's situation changes or something better comes along, what is the point of creating bad feelings and going through litigation to hold the customer to the agreement. What does that do for the providers integrity? It's just not worth it.
Since DemandCaster's launch in 2007, the average time our users have used our services (for six months or longer) has been 3 years! Our customer retention rate stands at over 98%! We have essentially secured long term contracts through our service and support, and not through a signed piece of paper. With deference to my fellow providers - that's what we're all about.
If you are still on the fence about DemandCaster, now is your opportunity to give us a try. We offer a FREE ONE-MONTH TRIAL of DemandCaster - with no obligation. If the product does not meet your expectations after the trial period, your data is returned to you and our storage centers are cleared. We are that confident in our product and can't wait to speak to you!
If you've ever thought about trying DemandCaster, now is a great time. We are offering ONE month of complimentary access to DemandCaster to help you learn first-hand how our cloud-based solution can improve your demand planning, supply planning, and sales and operations planning processes.
Cloud-Based Solutions and S&OP
There are so many great advantages to cloud-based solutions for S&OP. In the customer relationship management (CRM) space, Salesforce.com has proven that point handily. Now, few people question the cost effectiveness or flexibility of putting CRM systems in the cloud.
Similar to Saleforce.com, DemandCaster is part of this new generation of cloud-based technologies. With low up-front costs, DemandCaster is relatively easy to launch and offers tangible savings, quickly.
Compared with licensed software solutions, that reduces both risk and costs.
A Costly Mistake
Here's an example of what I mean. A few months back, DemandCaster Consulting started a project with a large US manufacturer. They had a complex operation, with multiple manufacturing facilities and warehouse locations.
When we engaged with the client, they'd already purchased a large, well-know demand solution (a competitor's solution, actually). But they were having some difficult problems, and they wanted our help to implement an S&OP process.
More to the point: The client had already spent over $300,000 on the product and countless internal hours, but some 6 months later, they still couldn't run a reliable forecast using their system.
Even so, they were married to it. There was no running away from a $300,000 investment. We agreed to help them get their system off the ground and development an effective S&OP process.
Picking Up the Pieces
But pressure was mounting. They needed to run their business. So we took the fastest approach we could: We implemented DemandCaster. The logic was that we'd run DemandCaster in parallel with their other system until the latter was working effectively.
The results were impressive. With DemandCaster, we were able to run forecasts using their data from input to generation in less than one week, compared with 6 months (and counting) via on the other system.
We also calculated optimal inventory levels and requirement plans only one week after the forecast were generated.
'If We Knew Now What We Knew Then'
To say they are now kicking themselves is an understatement. We proved an important business point. DemandCaster is far more effective than systems built for larger companies, at a fraction of the price. Across the board, they have commented on DemandCaster's ease of use and robust features. Moreover, they're staying with DemandCaster.
As mentioned, this month, we're offering 30 days of complimentary access to DemandCaster.
Get started on a trial by following a simple 3 step process:
- Click on the Free Trial button below and complete the trial request form.
- Within 24 hours one of our DemandCaster experts will contact you and walk you through the data requirements, provision your trial account, and provide a brief tutorial on how to use DemandCaster.
- You then prepare your data, upload, and get started.
Your complimentary trial does not commence until you have loaded reliable data into DemandCaster. Throughout your trial we will answer your questions by email or phone to assure you maximize your time evaluating DemandCaster. If you need more time to complete your evaluation - just ask!
We have released a new feature today called "Clean to Build." During the Supply Planning process and MRP, this feature provides users with the ability to see if the item that is scheduled to be released to production has the components available to do so.
The process is based on a dual color code icon:
1. Suggested Order Color Coded Planner Action: The Red and Green circles shown below in the suggested order list designate if the item is clean to build. The outside color designates there are sufficient components available for the item to be released to production. Green is good - components are available. Red is bad - there are component shortages.
The small square within the circle designates the status of the item itself. A red square means that net available over lead time is negative, green means net available over lead time is greater than or equal to 0.
2. Click Through: The user may click on the colored icon to view which components are specifically an issue. This takes the user to the Clean to Build interface that summarizes the availability of components relative to need.
The key columns are the Current On Hand, Qty Required, and Net Available over Lead Time. If the current on hand is greater than the quantity required for the specific suggested order line item but the Net Available over Lead Time is negative, the user may choose to start the given line item over the other line items that also require the component.
3. BOM View: The user may also click to view the item planning detail with the same color coding applied to the BOM panel to the left. This way he or she can get a complete view of the item and click to view specific items that may have shortages to make appropriate planning decision.
We hope you find this new feature helpful. As always, please contact us if you should have any questions.
Happy Planning!
If you've ever thought about trying DemandCaster, now is a great time. We're offering ONE month of complimentary access to DemandCaster to help you learn first-hand how our cloud-based solution can improve your demand planning, supply planning, and sales and operations planning (S&OP) processes.
When we talk with prospective clients about demand planning, supply planning, and S&OP, we tend to come across a few common misconceptions about cloud-based software solutions. These "myths" are important to understand because they impact the way people make key decisions about technology.
Here they are. The top 3 myths about demand and supply planning/S&OP systems:
No. 1) Demand and supply planning/S&OP systems are similar to ERP packages. No matter which solution you choose, it's a huge investment that you have to live with for a long time.
We hear this often. In fact, many of our prospective clients approach their software evaluation process with the same mindset.
But times have changed. The Software-as-a-Service model allows customers to take advantage of leading technology with lower up-front investment and risk. DemandCaster's subscription-based pricing model and month-to-month terms significantly mitigate risk for the customer. (We're doing for demand and supply planning/S&OP technology what Salesforce.com has done so successfully for CRM.)
In most cases, companies achieve better results, faster. For instance, DemandCaster customers have achieved strong financial results within the first six months of implementation, including the following:
- Reducing inventory between 20% and 30%.
- Decreasing production lead times from 60% to 77%.
- Improving manufacturing capacity from 22% to 30%.
- Increasing sales revenues per employee between 24% and 33%.
- Increasing manufacturing productivity between 22% and 66%.
No. 2) Cloud-based solutions aren't robust enough to meet the demands of complex operations.
Supply chain managers often have a tough time believing that a platform such as DemandCaster (which doesn't ship with a 20-page license agreement and $300,000 price tag) could be robust enough to meet their requirements.
Frankly, that's just nonsense. Because of flexible, scalable technology, DemandCaster clients range in size, from companies with revenues of $2 million to $200 million, with planning requirements of more than thousands of SKU's, and with multiple production and warehouse locations.
No. 3) No affordable solution can deliver higher ROI than spreadsheets.
Smaller companies that haven't been exposed to planning solutions also have a hard time believing that demand and supply planning/S&OP systems can perform more effectively than spreadsheet solutions.
As someone who's built more than a few spreadsheets, I understand the mindset. But it's a false one. There's just no comparing the advantages a company can achieve with real-time analytics. (It's the difference between walking and running in this competitive economy.)
On average, automating processes that were previously managed via spreadsheets saves users a minimum of 10 hours of month. That in itself is a huge financial savings.
Taking a Test-Drive
I've saved the best for last: Trying out a cloud-based solution in your own environment is typically a low-cost and low-risk way to evaluate a solution.
As mentioned, this month, we're offering 30 days of complimentary access to DemandCaster. Here's how to get the ball rolling:
- Click on the Free Trial button below and complete the trial request form.
- Within 24 hours one of our DemandCaster experts will contact you and walk you through the data requirements, provision your trial account, and provide a brief tutorial on how to use DemandCaster.
- You then prepare your data, upload, and get started.
Your complimentary trial does not commence until you have loaded reliable data into DemandCaster. Throughout your trial we'll answer your questions via email or phone to assure you maximize your time evaluating DemandCaster. If you need more time to complete your evaluation - just ask!
Today we launched two new capacity view options. In addition to the standard 1 day and 1 week bucketed view, we have added a 4 week bucket and an 8 week bucket.
The bucketing options are accessed by clicking on the settings icon in the toolbar. The setting reveals multiple view options.
Select the desired view option and click save. Once saved, the view will aggregate all the hours and units within the incremental period selected.
These view settings are effective when assessing long term capacity to communicate lead times with customers as well as during the supply planning component of the Sales and Operations planning process (S&OP). This feature, like many others, was added at the request of one of our clients. We appreciate their input in making DemandCaster a user friendly yet powerful planning tool.
We are very excited to announce a number of important updates to the DemandCaster platform today. More will follow in the coming weeks but this initial release includes updates to all DemandCaster analytics including a new Safety Stock Analytic, improved component level reorder point calculations, and the pre-release of our redesigned Sales and Operations Planning module. A summary of the changes follows.
Analytic Updates:
1. Classification Analytic: We have simplified the classification analytic interface. A few columns that provided little value were removed to focus users on the calculations that help best define an items importance in the context of the overall business and location.
2. Segmentation Analytic: As documented in the previous blog post, we introduced the capability to not only check actual to forecast accuracy by item but also check the actual against a naive forecast. Since the introduction of this new feature we have further improved the layout of the analysis to help users assign planning and replenishment policies by segmenting their items in numerous meaningful categories.
3. Safety Stock Analytic: Previously the safety stock options were included within the other analytics. We have created its own analytic that presents the current safety stock calculation options available in DemandCaster in a single page. This allows the review and modification of safety stocks to be much easier than previously provided.
4. Reorder Point Analytic: This analytic has undergone the most significant change. It is an output of all the DemandCaster analytics. Simply, the reorder point analytic allows the user to check their previously established reorder points to assess if they were too high or low. In addition, the user uses this information to assess if the currently defined reorder point is sufficient for future demand. The values in the Actual to Forecast Accuracy, Calculated Reorder Point, and Demand Change Alert columns are hyper-linked to the appropriate analytic to allow for a more in depth review of the value. Finally, we have included an analysis of the high demand during the safety stock calculation period to allow the user to assess if the current reorder point is too high or low relative to demand.
This newly designed analytic also provides for a much more stable reorder point calculation at the component level. This change helps addresses the rare occurrence where component level requirements may be over or understated.
5. Option Tab: In addition to the analytics, we have simplified the option tab. Gone are many of the calculations that were never used by our users and created clutter. The resulting calculations and options are the most significant necessary to set an appropriate demand and supply plan for the item. We have improved some of the suggested order logic to help further optimize inventory.
6. Advanced Tab: After many requests by our clients, we have introduced the advanced tab. The advanced tab allows experienced users to modify forecasting variables. We recommend only experienced forecasters try this new feature. In most every situation, the current automated forecasting best fit approach is sufficient.
7. System Settings: Similar to the options tab, the system settings have been reorganized to group similar settings together. This allows the selection of settings to be much more intuitive than previously provided.
7. Suggested Orders: The suggested orders have been updated with a new feature for those users that submit suggested orders directly to their ERP system for execution. The new feature allows order lines to be suggested and approved directly in the suggested order interface en-masse and not only at the item level as previously required. The suggested orders have also been reorganized removing a number of non-essential calculations and information.
Finally, we have also pre-released our redesigned S&OP module. We are very excited about the version of this powerful new planning module. This new version has been developed under the guidance of S&OP expert John Boyer. John is a well know S&OP consultant who has implemented over 40 S&OP processes in companies large and small. He will be presenting S&OP Implementation, Process, and Practice at this years APICS International Conference & Expo in Denver, Colorado.
We will post the details of this newly updated module soon. Please contact us if you would like to learn more.
We hope todays newly released features will help further improve our user's demand and supply planning processes. If you should run into any issues or have any questions, please do not hesitate to contact us.
Happy planning!
Ara
On Monday, July 30th, we released a new DemandCaster feature. Users are now able to monitor their demand planning / forecast performance via the segmentation analysis as well as compare their forecast performance against a simple moving average forecast.
Though we have always provided the ability to check demand planning accuracy, the previous process was not as intuitive and easy to run within the current "Forecast Performance" analysis. The new process is as simple as clicking "Run Segmentation" in the Segmentation interface on a monthly basis and reviewing the results!
What has changed? What was once called "Forecastability" is now called "Accuracy" and its column is designated by the letter "A" in the various interfaces. The accuracy measure is calculated as 1-abs((Actual-Forecast)/Forecast), where the calculation uses the cummulative actual and forecasted demand over the items lead time or 5 weeks whichever is greater.
In addition, DemandCaster calculates a naive forecast based on a 13 week average. This process has been provided based on the Forecast Value Added approach promoted by Michael Gilliland. Accuracy of 80% and above will be considered High accuracy, between 50% and 80% will be Medium, and less than 50% will be Low.
The new process is executed by clicking on the generate analysis button in the Segmentation interface and proceeds as follows:
- User clicks the generate analysis button in the Segmentation.
- The BI and OF commence as normal.
- The forecastability will launch the Forecast Performance methodology which will compare actual to forecast over the most recent 5 week period or the item lead time whichever is greater.
- In addition, there will be a 13 week simple moving average forecast created as part of the holdback to serve as a comparison to the forecast versus actual comparison.
- The user reviews the results by filtering the data and may choose to review the item detail and make changes to the forecast.
This new process accomplishes a few important benefits for the user.
- It provides a straight forward means to review the effectiveness of the demand planning process by item.
- It compares the statistical forecasts and any edits that are made against a simple moving average. This provides the users with a baseline to assess if the forecasting process they are employing are improving forecast performance.
- If the forecast accuracy is low, the user may click the "view detail" button to view the actual to forecast data and make adjustments to assess if a change in the forecast methodology may have improved the accuracy. The user may then apply the adjustments to future forecasts if they so desire.
We recommend running this analysis on a monthly basis as part of the users normal monthly maintenance and review process.
Let us know your thoughts on this new process and if you have any ideas or suggestions that could further improve the segmentation analysis please feel free to let us know.
"An organism at war with itself cannot survive," said the famous astronomer Carl Sagan. Yet in today's competitive manufacturing environments, many sales and operations 
departments continue to wage war one another—to the detriment of the organization, writes John Boyer in a recent white paper. "If we waste time trying to figure out how we can 'get 'em next time,' the competition will surely 'get us,'" writes Boyer.
So, how can sales and operations stop bickering—and give themselves a fighting chance to win against their real competition?
There's no magic bullet to this age-old problem; however, there are proven management practices being used today that are helping organizations achieve cooperation and teamwork, namely, Sales and Operations Planning (S&OP).
S&OP is a way for companies—at a strategic level—to balance demand and supply on a consistent basis, over a given planning horizon and level of detail. It requires two basic building blocks, according to Boyer:
- Sales people describe what they believe the business will sell.
- Operations people describe what the business can supply to meet those sales.
The difference between the two is the change in inventory investment.
By balancing demand and supply, businesses keep costs down, and customers happy.
For example, say demand becomes greater than supply. Typically that means overtime hours, excessive allocations, outsourcing, and premium freight—just to name a few problems.
Now suppose supply becomes greater than demand. What happens? Underutilized fixed costs, excess inventory, reduction in force expense, etc.
Most industry experts agree: Costs rise when demand and supply are out of balance. However, when they are in balance, a company is better positioned to operate at the lowest cost base, ship product on time, and minimize inventory investment.
S&OP is indeed a "practice of choice," as Boyer writes, that enables the critical balance of demand and supply.
Successful S&OP brings sales people and operations people to the same table.
S&OP creates an environment where all functions (sales and marketing, manufacturing, materials, finance and accounting, engineering, information technology, and human resources) together are working to improve business performance, not trying to bury each other!
A formal S&OP process provides formats, data, structure, timelines, facts, and agendas for building an accountable decision making group. It replaces fragmented, opinion-based foxhole management tactics that drive us to self-competition.
Tell us about your experiences and challenges in balancing Sales' and Operations' goals.
We are pleased to announce that we will be presenting the webinar "The 8 Steps to Sales and Operations Planning (S&OP) Success" on June 12, 2012 at 3:00 pm. The webinar is sponsored by IMEC (Illinois Manufacturing Extention Center) and will focus on the following key learning areas:
- Review of the 8 essential steps of a best in class S&OP process
- Presentation of the critical pre-requisites required in each process step.
- Assessment of the tangible financial benefits realized from a successful implementation.
Sales and Operations Planning (S&OP) is an integrated business management process where an organization's executive/leadership team continually achieves focus, alignment and synchronization among all functions of the organization.
Done well, the S&OP process enables effective supply chain management that optimizes resources and drives high levels of customer service particularly in environments where demand and supply uncertainty is the operating norm. Though the process is most often considered to be applicable to only very large organizations, the methodology can be easily adjusted to any size organization.
The webinar is open to the public so please follow this link to sign up.
About IMEC:
IMEC delivers hands-on technical assistance and strategic advisement to help manufacturers to be more productive and globally competitive. Since 1996, IMEC has helped more than 2,500 Illinois manufacturing companies to achieve more than $1.5 billion in productivity, profit, and cost improvements.
We are pleased to announce that we will be exhibiting at the 2012 APICS/IBF Best of the Best S&OP conference this coming June 14 and 15, 2012 in Chicago, IL. More information can be found in our announcement page.
The Best of the Best S&OP Conference is designed to provide in-depth education and practical answers from the supply and demand sides of sales and operations planning (S&OP). At the Best of the Best S&OP Conference, you will discover how to introduce, plan, implement, and collaborate on S&OP at your organization.
In parallel with the conference, we will also be announcing the release of the latest version of the DemandCaster S&OP module. Version 2 of the S&OP module is a significant update to the current DemandCaster S&OP process. It is based on the S&OP methodology of John E. Boyer, the noted S&OP consultant who regularly speaks at APICS, IBF, and ISM conferences. We have worked closely with Mr. Boyer to develop a technology platform that will significantly improve the efficiency and effectiveness of an organizations S&OP process.
Look forward to seeing you all there.