Demand and Supply Integration: The Key to World-Class Demand Forecasting (FT Press Operations Management)

“…a powerful reference guide for every supply chain leader and practitioner.”

—Reuben E. Slone, Senior Vice-President, Supply Chain, Walgreens

“This is a well-done, forward-thinking, practical guide for business professionals who want to improve their forecasting processes.”

—Dwight Thomas, Retired, Former Supply Chain Planning Manager for Alcatel-Lucent Technologies

“Mark Moon has provided excellent insight in defining the importance of integrating demand and supply into a true business process and demonstrating the top and bottom line impact.”

—Edward Guzowski, Director, SIOP, Eaton Corporation

“Moon is one of the leading minds on the rapidly evolving subject of Demand and Supply Integration. In this book, he grounds thought-provoking insights on the subject with the abundant use of current, real-world examples from a variety of different industries. A must-read for both practitioner and academic.”

—Nikhil Sagar, Vice President, Inventory Management, Fortune 100 Retailer

Dr. Mark Moon introduces a pioneering approach to systematically maximizing the financial value and strategic impact of your demand forecasts throughout the entire organization. He shows how to implement world-class demand forecasting management and use it to drive quantifiable and consistent competitive advantage.

Moon identifies the characteristics and elements of a comprehensive Demand and Supply Integration (DSI) process, shows how it differs from Sales & Operations Planning (S&OP), and helps you recognize the symptoms of failures in demand-supply integration. You’ll learn how to approach demand forecasting more systematically, and select and apply the right techniques for your business, government agency, or military organization.

Drawing on nearly two decades of experience as a pioneer in the field, Moon offers field-proven solutions for optimizing everything from traditional statistical methods to performance management. He then shows how to use demand reviews to transform forecasting into a core element of strategic business planning.

Supply chain professionals: master pioneering techniques for integrating demand and supply, and create demand forecasts that are far more accurate and useful! In Demand and Supply Integration, Dr. Mark Moon presents the specific design characteristics of a world-class demand forecasting management process, showing how to effectively integrate demand forecasting within a comprehensive Demand and Supply Integration (DSI) process. Writing for supply chain professionals in any business, government agency, or military procurement organization, Moon explains what DSI is, how it differs from approaches such as SandOP, and how to recognize the symptoms of failures to sufficiently integrate demand and supply. He outlines the key characteristics of successful DSI implementations, shows how to approach Demand Forecasting as a management process, and guides you through understanding, selecting, and applying the best available qualitative and quantitative forecasting techniques. You'll learn how to thoroughly reflect market intelligence in your forecasts; measure your forecasting performance; implement state-of-the-art demand forecasting systems; manage Demand Reviews, and much more. For wide audiences of supply chain, logistics, and operations management professionals at all levels, from analyst and manager to Director, Vice President, and Chief Supply Chain Officer; and for researchers and graduate students in the field.

Dr. Mark A. Moon is an Associate Professor of Marketing and Head of the Department of Marketing and Supply Chain Management at the University of Tennessee, Knoxville. Prior to joining the UT faculty in 1993, Dr. Moon earned his Ph.D. from the University of North Carolina at Chapel Hill. He also holds MBA and BA degrees from the University of Michigan in Ann Arbor. Dr. Moon’s professional experience includes positions in sales and marketing with IBM and Xerox. He teaches at the undergraduate, MBA, and Executive MBA, and Ph.D. levels, and teaches demand planning, forecasting, and marketing strategy in numerous executive programs offered at the University of Tennessee’s Center for Executive Education. Dr. Moon’s primary research interests are in demand management, sales forecasting, buyer-seller relationships, and demand/supply integration (or sales and operations planning). He has published in the Journal of the Academy of Marketing Science, International Journal of Forecasting, Supply Chain Management Review, Foresight, Journal of Personal Selling and Sales Management, Journal of Business Forecasting, Journal of Marketing Education, Marketing Education Review, Business Horizons, Industrial Marketing Management, Journal of Marketing Theory and Practice, and several national conference proceedings. Dr. Moon is also the author, along with Dr. John T. (Tom) Mentzer of Sales Forecasting Management: A Demand Management Approach.

Dr. Moon has consulted with numerous companies on sales forecasting re-engineering projects, including AET Films, AlliedSignal, Amway, Avery Dennison, Bacardi USA, Conagra, Continental Tire, Cooper Tire, Corning, Deere and Company, DuPont, Eastman Chemical, Ethicon, Exxon, Hershey Foods, Lucent Technologies, Maxtor, Michelin, Motorola PCS, OfficeMax, Orbit Irrigation Products, Peerless Pumps, Pharmavite, Philips Consumer Electronics, Sara Lee Intimate Apparel, Smith & Nephew, Union Pacific Railroad, Whirlpool, and Williamson-Dickie. He has also consulted with numerous companies on the topic of supply chain strategy, including Lockheed-Martin, Nissan North America, Johnson & Johnson, Radio Systems Corporation, Cummins Filtration, Tyco, and Winn- Dixie. In addition, Dr. Moon has delivered custom executive education programs, covering topics that include marketing strategy, sales forecasting, demand planning, and sales and operation planning, with numerous companies, including Honeywell, Coca-Cola, Corning, BASF, 3M, Union Pacific Railroad, EdAmerica, Nestle, Orbit Irrigation Products, Sony, American Standard, and CHEP.

Mark was born and raised in Ann Arbor, Michigan. He has two sons: Colin and David. Away from the office, Mark enjoys traveling with his wife, Carol, and golfing with his sons, who now beat him regularly.

Preface     xxi

Chapter 1    Demand/Supply Integration     1

Chapter 2    Demand Forecasting as a Management Process     31

Chapter 3    Quantitative Forecasting Techniques     59

Chapter 4    Qualitative Forecasting Techniques     93

Chapter 5    Incorporating Market Intelligence into the Forecast     119

Chapter 6    Performance Measurement     139

Chapter 7    World-Class Demand Forecasting     171

Chapter 8    Bringing It Back to Demand/Supply Integration: Managing the Demand Review     219

Index     237