MISSISSAUGA, Ontario—No matter the improvements in forecasting, demand planning and predictive modelling made over the last 40 years, there is one figure that refuses to improve: eight percent of items are out-of-stock and not available on store shelves at any given time, and during promotions that number jumps to approximately 15 percent.
Mike Doherty, a partner at Cambridge, Ontario-based Demand Clarity Inc, and André Martin, vice-president of flowcasting for JDA Software Group Inc in Scottsdale, Arizona, presented those figures at a technology session held during the 2013 Supply Chain Canada conference.
The pair told the audience in Mississauga, Ontario that although the out-of-stock figure hasn’t changed in decades, there is no reason for that situation to continue. They believe that by using the flowcasting methodology, the out-of-stock number can be reduced to zero (or near zero).
Flowcasting collects data at the retail point-of-sale (POS) and uses it exclusively as the sole source information throughout the entire supply chain. Rather than having multiple forecasts (one compiled by the retailer, one by the distributor, one by the manufacturer, etc), the flowcasting process sends one POS forecast throughout the entire supply chain.
Doherty and Martin provide a more complete explanation of flowcasting, and discuss the advantages it brings and the challenges it presents in the video below.
To see more MM&D original videos click here for the full list.
In addition to the flowcasting session, delegates to the conference had the opportunity to listen to a wide variety of industry experts including:
- Robert Vallender, head of physical logistics CO-Supply Chain, at Nestec Ltd, who spoke about the some of the security challenges Nestlé has faced—including having thieves using fake documents to pick up loads from the company’s DCs and steal them—the need to alter recipes in order to adapt each product to the tastes of the geographical market, and how today’s VUCA (volatile, uncertain, complex and ambiguous) world market keeps adding demands onto supply chains.
- Derrick Lio, operations manager for Lexmark Canada Inc, who explained how the printer manufacturer stopped dealing with over 20 different carriers and consolidated all of its transportation needs with one company —Ryder Canada—and now benefits from simplified, standardized reporting, and improved capacity.
- Bryan Tremblay, vice-president of supply chain and logistics at The Source, whose presentation focused on how the electronics retailer incorporates its bricks-and mortar store into its e-commerce distribution network, and how the company manages to serve both its retail and online customers out of one common, centralized distribution centre.
- Douglas Harrison, chief operating officer at Day & Ross Transportation Group, who told the audience how the transportation company is evolving its corporate culure and its approach to business with the help of coaches and industrial psychologists. He also explained how the company has moved away from the RFP processes and now prefers to use RFIs (requests for information) when negotiating new contracts.
- Aaron Hutcherson, vice-president of global supply chain planning and procurement at McCain Foods Ltd, who shared with the audience the lessons his company learned when McCain’s supply chain couldn’t support the surprisingly successful launch of a new food product overseas, and how subsequent launches into new markets now take the supply chain into greater consideration.
For more Supply Chain Canada coverage, see the coming May-June issue of MM&D magazine.