|
Account Based Forecasting or ABF is a key
building block in establishing a collaborative demand planning
process with your key customers. Variously called as Customer
Specific forecasting or just Account and National Forecasting,
the essence of the process is to break down the demand streams
into key customer demand and an all other Demand Group that lumps
a number of smaller customers into one statistical series.
The idea behind this methodology is the fact that focused selling
and promotions are designed around the major customers. As the
popular cliché on forecasting goes, such
selling activity aggravates the demand volatility. Once
these major customers and their volatility-enhancing events are
identified and isolated, the remaining All Other Demand stream
should be fairly predictable.
Account Based Forecasting is
 an integrated
approach
to leverage
customer intelligence (both inventory and retail activity)
to model promotional
activity into both Sales and shipment forecasts
to build a
deployable DC level Plan.
Using this integrated approach, the output is a Bottom-up National
forecast for each SKU. The National Forecast can be planned as
two demand clusters: Key Customer Demand and an All Other Demand.
The ABF collaboration Model leverages consumption and inventory
data from the customer and uses a statistical engine to come up
with the customer level demand forecasts. The major advantage
the ABF process is it enables flexible supply chain planning because
of the visibility of customer level demand.
If you would like to find out more details on facilitating or
developing an account based forecasting process, please contact
us.
|