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Route to Market & Supply Chain Blog

FMCG/Fuel Forecast Accuracy: Forget Flying Fears

Posted by Dave Jordan on Wed, Sep 12, 2012

Sales Forecast AccuracyI have just arrived back from a great holiday full of sun, sand, sea and sacks of candy-floss which inevitably inspired me to write.

I was already in my late twenties when I first flew primarily due to an irrational fear of flying. As a conscious effort to overcome this I took a new job requiring “significant overseas travel” and soon found myself on a plane to Kuala Lumpur. Hundreds of flights later I find the experience boring rather than something to worry about. After all when you are at 30,000 feet, and there is absolutely nothing you can do to keep the plane airborne so why not simply accept the salty nibbles, the plastic bottle of wine and relax.

Severe turbulence is of course unpleasant and to be avoided but the only 2 occasions I have been seriously concerned occurred while initially on the ground. Flying out of Jeddah on a crowded flight the last person to board slipped as he placed a bag in the overhead locker. Various belongings dropped to the floor including a cardboard strip of 10 craft knives! For months my eye sight was badly affected by having one eye continually on the passenger and the other on the overhead locker until we reached Cairo.

The second incident happened at the start of the recent trip after the captain said we were ready to go. As wedid  start to slowly move a tanker truck raced to the side of the plane and seeing the aircraft move away the driver stood up, waved his hands madly and seemed to be saying “I haven’t refuelled you yet”.

I can only assume the fuel logistics man was at fault as we landed safely several hours later without a hint of engine coughing or swerving to get the last reserves of fuel from the wing extremes. If our plane was not short of fuel then I do wonder which one was!

In FMCG terms it is all about having enough product in stock in warehouses and a reserve just in case. If you have too little you will lose sales/crash and if you have too much you will waste money on unnecessary storage, potential write-off and destruction. Getting your sales forecast accuracy up to a high level will allow the remainder of the business to supply what is required to the right customer at the right time, cost and quality.

Any tools you use e.g. ERP, APO etc will not do this for you. Yes, they will facilitate decision making but the basic input data has to come from the sales force and often this is poor quality or non-existent. Successful companies include those having a sales force that understands the value of the rest of the business, the challenges they face and the importance of forecast accuracy. Companies with a dismissive sales approach to forecast accuracy will always struggle even if they have the best IT in the world.

Taking all constraints and eventualities into account, in flying terms it is good to know that sales people generally do not forecast the fuel of commercial airplanes.

Tags: FMCG, Logistica Management, Dave Jordan, Performance Improvement, Forecasting & Demand Planning, Logistics Management, Sales, Inventory Management & Stock Control

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