Lessons Learned from Implementing Forecasting and Planning Systems

Make sure that the forecasting system you buy is robust, flexible and specific to the industry . hire a consultant based on his or her credentials, not on the basis of company affiliation . make sure to have an in-house expert who can take over after the vendor and consultants are gone. There are many companies now that have either implemented a forecasting system or in the process of doing it. These systems are extremely costly to implement and maintain; however, many of these companies have not received the desired return on their investment on these products. This is due to poor implementation strategies and inefficient use. This became evident when I attended one user group conference, where a large number of users admitted that they were using their forecasting system simply as a spreadsheet package. One person even presented a paper to show how his company used another software to forecast and then transferred the forecast data back into its expensive forecasting system. Many of the companies that have been using a forecasting system for some time are still experiencing problems with forecasting as well as with its maintenance. Maybe the reason why my company was successful because it didn't have a legacy forecast system to start with, and took all the necessary steps before installing it. In any way, we were successful from the beginning to the end. The company that I am referring to sold gardening products, had about 300 employees, and all of its products were sold on internet, which were shipped directly by the suppliers, thereby creating a virtual supply chain. As such we needed shipping and order forecasts, time phased forecasts, and collection forecasts (for independent products packaged together). The products ranged from seeds, trees, and flowers to novelty items, pajamas, and gardening tools. The system handled over 100 suppliers and over 20,000 products, which changed weekly. Here are the few lessons we learned, which can be helpful to those who are in the process of implementing such a system. LESSON 1 BUY INDUSTRY SPECIFIC FORECASTING SYSTEM Whatever the systems you decide to implement make sure it is industry specific and/or there is enough flexibility in it to satisfy different needs, because each industry has its own requirements. Otherwise, you would become a guinea pig that would cost you time, money and frustration. Flexibility is also needed to obtain buy-in from other users within a company. The system is bound to doom if it does not meet the needs of other users. Keep in mind, people who sell such systems are merely salespeople. They don't have any experience in implementing and customizing it. Neither do they have any experience in customer service. So, make sure whatever they promise is obtained in writing. The system should also be flexible enough to meet both the current and future needs. It is difficult to determine the future needs, but answers to these three questions will provide some guidance: (1) How does the vendor of the forecasting system prioritize its future enhancements? (2) How good is its user group? (3) How responsive is the vendor of the system to the needs of its users? LESSON 2 NO TURNKEY APPLICATIONS Turnkey applications are myths created by vendors of forecasting systems. No matter what they say, you will have to invest considerable time and efforts to adapt it to your needs. Vendors who develop a system that is specific to a company or industry would certainly limit its profit opportunities. As such, systems are created to serve a diverse group of companies and industries. This again reaffirms the need for a flexible tool, which can be easily customized. LESSON 3 CONSULTANTS ARE NOT THE EXPERTS There is a very good chance that the consultant you have hired to guide you along does not have any experience in your industry or with your system. Consultants are paid exorbitant fees, but they are seldom interviewed or evaluated beforehand. …