Establishing collaborative demand-planning initiatives with key customers, including procedures for calibrating the accuracy of the forecast, will reduce overproduction that leads to excess inventories. Actions for Vendors Customers will demand collaboration sooner rather than later, so vendors should begin to prepare now. Applications supporting collaboration are immature and often require integration and augmentation to provide full solutions. Important data to review includes production capacity, cycle times, inventory, lot characteristic quality and yields. Jointly establish common measurement criteria with key trading partners.
Internal metrics are often meaningless to trading partners.
Once metrics have been agreed on and internal data is in shape, begin pilots to provide interactive CTP information to key trading partners. Begin with just two or three strategic customers before attempting a broader rollout. Engage these strategic customers in collaborative demand-forecasting pilots to improve the timeliness and realism of their forecasts, but temper customer forecast data with other assessments. Vendors can also improve customer service without increasing inventory risk. Better visibility of customers' changing demand patterns will not only reduce overproduction when demand falls off but also improve allocation accuracy in times of constrained supply.