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. The financial penalty from shortcomings in these processes can be substantial for vendors and customers. Cisco is now using software from Manugistics Group to implement a private marketplace that will enable it to collaborate on demand and supply with its suppliers. This will increase profitability, improve customer service levels and reduce inventory risk. Winning vendors will leverage the collaborative capabilities of the Internet to achieve this.