MATC H I N G SUP P LY AND DEMAND
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Forecast for capacity, execute against demand
We have already made the point that in today’s volatile business environment it is
much harder to achieve high levels of forecast accuracy for individual items. Whilst
managers will always be seeking better forecasts, the fact is that as uncertainty
increases it gets harder to run a business on the basis of forecast demand at the
stock keeping unit (SKU) level. Instead the focus has to be on how the company
can move from a forecast-driven to a demand-driven mentality. Basically what this
means is that ways have to be found to make it possible to react to demand within
the customer’s order cycle. Thus if the customer’s expectation is for a five-day lead
time ...