FMCG Manufacturer
Background
Software manufacturer enjoying high margins but suffering from high obsolescence on new products.Accurate forecasting of new product take-up proving very difficult.
Issues
High demand for launch stock indistinguishable from high consumer demand.Actual sell through data from retailers was too late to allow the supply chain to react.
All launch stock treated as consignment stock with sale or return.
Solutions
Through careful analysis of historical sell through data, a number of generic life cycle curves were identified. Furthermore it became possible to predict which of these curves was most likely for each product type.The actual demand could be forecast by scaling these standard curves using simple parameters.
In parallel with this improvement to the forecasting and business case analysis for new products, the process for obtaining sell through data was re-engineered and the leadtime dramatically reduced.
Standard Life Cycle Curves
