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Manufacturings Future:
Going Beyond-theProduct
Tony Kratovil
Industry Director
Manufacturing & Automotive
Heavy Industrials
Durable Goods
Diversified Industrials
Automotive
Connectivity
Automation
Mass Production
Mechanization
1700s
1900s
1970s
Today
More Empowered
Personalized
Smart-enabled
Relationship
Engagement
Services
Front-office Engagement
1:1, data-driven, proactive
marketing, sales, service
Agile Innovation
Real-time connected
product insight driving
new services
61%
rely on spreadsheets
to track customer
data
Systems of
Record
ERP
EDW
Internal Focus
MES
Logistics
Demand
Planning
HR
Manufacturers Need a
System of Engagement
87%
want to reimagine
service with digital
engagement
Systems of
Engagement
Cloud
Mobile
Systems of
Record
ERP
EDW
MES
Logistics
Social
Data
Science
Demand
Planning
Internet of
Things
HR
Roadmap to Go Beyond-the-Product
Digitize Alignment
Service Excellence
Expedite 1:1
service everywhere
Unlock ERP
Drive real-time
global alignment
IoT
Digitize Innovation
Connected Products
Predict & personalize with
real-time insight
Digitize Alignment
Digitize Innovation
Unlock ERP
Align disconnected value chain globally
Unlock Data
Integrate legacy data into a real-time, extensible, standards-based,
scalable cloud platform
Mobile-ize Insight
Lightning development UI to build employee & partner apps across HR,
Operations, PLM, Quality, Inventory Management
Align Everyone
Mobile collaboration, built-in analytics & 3600 customer view, driven by
CRM & ERP data, for everyone to align around the customer
Manufacturers have struggled to accurately forecast sales for decades. They lose
revenue and carry excess inventory. It is a very expensive issue
C O N S E Q U E N C E S O F H AV I N G P O O R S A L E S
F O R E C A S T I N G DATA F O R M A N U FA C T U R E R S
Historically inaccurate
Not timely
Inaccurate/incomplete forecast
ACCURATE SALES
FORECASTS
REVENUE 10%-15%
Lower level of on-hand inventory
(20% vs. 35%) as a % of total sales
Less unfulfilled backlog (10% vs.
14%)
Reduced level of obsolete inventory
(less than half )
Source: Answering the Sales Forecasting Challenge For Manufacturers by Right90 May 2010)
Three issues are pervasive. The first is supplementing (predicted) historical and
market data with (actual) input from customers and distributors
C U S TO M E R I N P U T S R E P R E S E N T
I N S I G H T I N TO T R U E D E M A N D
Extrapolative
Demand
Statistical
Forecast
Forecast
Accuracy
Judgmental
Test
Customer
Inputs
H O W D O YO U D O T H I S TO DAY ?
T Y P I C A L S A L E S A N D D E M A N D P L A N N I N G P R O C E S S C R E AT E F O R E C A S T S L A C K I N G
INTEGRITY AND THUS CONFIDENCE
Limited Controls =
poor data
Compensates for
poor data
4-24 month
Component forecast
sent to suppliers
Overcompensation=
excess inventory
Based on
inaccurate data
Based on
inaccurate data
Customer
sends 0-4
month
delivery
schedule
weekly
The third issue is incomplete data that lacks the details that demand planning teams
need. Imagine if there were a solution that addressed all three
DATA A C C U R A C Y + $ 0 0 0 K I N S AV I N G S + 6 0 % R E D U C T I O N I N O R D E R E N T RY T I M E
ACCURATE FORECASTS
REVENUE
Lower level of on-hand
inventory
Less unfulfilled backlog
Reduced level of
obsolete inventory
DISTRIBUTER
DEMAND TEAM
Ability to update
forecast
Global Unlock
Overview of forecast
page
Transfer Volume to
Build Lists
Control distributor
access
4/7/2016
S A L E S & D E M A N D T E A M S C O L L A B O R AT E O N
SALES FORECASTS WITH FULL VISBILITY
4/7/2016
BUSINESS SITUATION
CHALLENGE
up to 27 months ahead
Long Term Forecasting (LTF) annually for up to 10
years
Data on Actuals, Orders and Business Plan for -12
months to +27
10
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