One retailer that I worked for used Google Sheets for their demand planning. The sales forecasts were meticulously prepared, broken down by brand and by region, with various useful summaries and charts and they tied into budgets and cash flow reports. Once a month we’d review sales performance vs. forecast for the previous month, try to understand the cause of any significant divergence from forecasts and, if necessary, adjust our forecasts and plans accordingly.
However, reviewing sales performance once per month simply wasn’t enough. When sales of a product took off, inventory levels quickly depleted and a one month delay in our response often meant long weeks of stock outs, missed sales and angry customers. Conversely, we often perceived slow moving products far too late and, when we did see them it was in clusters so we had large quantities of hard to move stock that needed to be cleared quickly in order to free up cash. The result was heavy discounting that hurt both our margins and our brand.
We all knew there was a problem and we could feel that our process was ungainly. To compare sales to forecasts, sales reports needed to be generated from a separate system and then manually copied/pasted into our forecasting spreadsheet. This was difficult, boring and time consuming – so naturally it wasn’t done very often.
Comparing sales to forecasts needs to be easy
Whatever you’re using to do your demand planning, be it Excel, SkuBrain or SAS Forecast Server, it’s critical that you be able to easily compare actual sales performance against forecasts. Importing actual sales data into your forecasts needs to be something that can be done at the click of a button, or even better, without clicking any buttons at all – by automating the process entirely.
Sales performance reports need to be accessible
Having up to date sales performance reports is great, but it’s all for naught if nobody looks at them. Your sales performance will determine whether you are able to make investments, pay suppliers on time and pay the rent so don’t ignore it!
At the very least, put the sales performance reports somewhere where everyone can see them. Even better, put them where people can’t help but see them, such as a dashboard.
The next release of SkuBrain will have a new widget on the dashboard that shows how sales are tracking vs. forecasts. Shortly, here’s the first thing you’ll see when you log into SkuBrain:
The new dashboard shows an aggregate of actual unit sales vs. forecasted unit sales, so you can quickly get an idea of whether your business is on track or not.
It’s early days yet so there is a lot yet to be done. For one thing, this is just an aggregate and hides much of the detail. Sales will likely exceed expectations for some products and fall short in others, even if the aggregate looks OK. So we need to add summaries of divergence from forecasts at lower levels in the forecasting hierarchy (e.g. from SKU level) and provide an easy way to navigate from that summary information down to the specific categories, products and SKUs that are out of line, but this gives you a little taste of where SkuBrain is headed.
More to come soon!