Now in its sixth year, this remains the most comprehensive study of demand planning performance, encompassing $250 billion in annual sales from the global businesses of 14 multinational consumer pro
Key takeaways from this year’s Forecasting
Benchmarking Study include:
• Network complexity continues to outpace sales. Since 2010, the number of items grew by 32% compared to a 4% increase in sales. As a result, average sales per item dropped 22%.
• The rate of new product introductions is considerably higher, with the number of distinct items for sale nearly tripling in the last 5 years, up 187%; 82% of these have since been discontinued.
• The long tail continues to grow longer and now accounts for 81% of items. A different view of the data shows that the top 10% of items generate 75% of sales; whereas the bottom 50% only contribute 1%.
• Existing demand planning technology and processes have reached their limits, with forecast value-added and accuracy remaining essentially flat, varying by no more than +/- 2% since 2010. This is a tribute to planners who have managed to maintain the status quo despite rapid proliferation, but is not sustainable.
• Demand Sensing provides a step-change in performance that management seeks by automating the use of market data, more than doubling forecast value-added and cutting average forecast error by 37%.
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