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THE OUTSIDE-IN PLANNING HANDBOOK | 2023
Bi-Directional Orchestration
In the outside-in process, demand is a flow. The streams are sensed, typed, and constantly aligned and orchestrated to improve supply flows in the demand analyzer. Flow typing enables the assignment
As the organization matures and refines the demand process, the goal is to ask, “ What is the Role of the Forecast? ” Then, based on a definition, the group aligns demand and supply flows. As shown in the six- stage maturity model in Table
of rules and policies while recognizing the characteristics of multiple supply chains. The flow is bi-directional across the organization as
Figure 8. Forecasting Planning Models in the As-Is State
5, the forecast’s role shifts as companies move from maturity stages 2-3 to 4-6 in the design of demand flows. The shift is from measuring
INPUT
ENGINE
PLAN
companies orchestrate demand and supply strategies based on market data. As shown in Figure 8, in traditional demand planning, the inputs are shipments or orders, and the output is a hierarchy of time-phased data. While companies have invested in improving the engines, few have challenged the model. (Model types include attribute-based modeling, probabilistic modeling, attach-rate forecasting, and flow-based modeling through the evolution of the graph.)
error to establishing discipline in forecasting by measuring and tracking Forecast-Value Added (FVA), bias, and bullwhip. In essence, companies implement demand planning solutions focusing on error and bias and never question if they are improving the demand forecast output to improve the signal.
Table 5. Changing Maturity of the Role of the Forecast in Supply Chain Planning
STAGE 1
STAGE 2
STAGE 3
STAGE 4
STAGE 5
STAGE 6
Set Inventory Targets for Safety Stock
Drive Planned Orders for S&OP
Determine the Form and Function of Inventory Targets
Demand Sensing and Translation of Market Signals
Drive Commodity Buying Decisions in Logistics and Procurement Sourcing
Bi-Directional Orchestration Baseline Demand: Analysis of Shifting/Shaping
Balance of Risk and Opportunity for the Organization
Design of Network. Balance and Risk and Opportunity for the Organization.
Cross-functional Demand Collaboration: What-if for Demand across Commercial and Operational Teams
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