André Martin, the father of Flowcasting and DRP, and Fred Baumann, JDA GVP of the Flowcasting business unit, presented the Flowcasting principles, advantages and early customer success during several well-received webcasts. In Parts I and II of this series, Baumann provided a brief summary of those webcasts and discussed what a Flowcasting-powered world might look like. In this final post, he will provide a roadmap for achieving the benefits of Flowcasting.
SCN: For manufacturers and retailers who would like to start down the path to this new world, what steps would you recommend?
Baumann: I would carve it into five key steps.
Learn – Evaluate -Select
I think the first step is getting an understanding of the Flowcasting concepts and its ability to create value for your own organization. Certainly, JDA can share what Flowcasting has meant for both retailers and manufacturers that have executed the process and share those learnings. But we can also create an executive point of view session to help ground stakeholders within the company on what Flowcasting is and how it is different from the way things are executed today, and how a proof of concept could be quickly generated and executed to quantify the value it can bring to your specific company. Within this first step you also have the opportunity to gain the executive sponsorship you need because this will impact multiple functions and will require interaction between IT and the functions supporting the business. You’ll want to try this with a small slice of the business to prove it to yourself and calculate the business case beyond the learning step.
Scope a pilot category with a selected trading partner
The second key step is to scope a pilot category with a trading partner. A retailer could select a manufacturer and a subset of that manufacturer’s items to work with collaboratively. A manufacturer could select a retailer and a subset of the categories they support. They could do analysis prior to engaging with a trading partner just to make sure they are comfortable that the process will work before they collaboratively connect in this Flowcasting approach.
We have had proof of concept models that can be executed in as little as 12 weeks. We help establish the items and categories to be tested, and as part of this pilot scope, assign the key stakeholders who are going to monitor, measure and execute the Flowcasting process to quantify the business case that would warrant a full transition to Flowcasting with your largest and most strategic trading partners.
Learn & Validate
The third step in the journey map is the Learn and Validate step. As manufacturers and retailers are working together in this new way, they are going to capture some key learnings about how they can run the business much more efficiently, such as reducing inventory, improving on-shelf availability, and creating more streamlined promotion flows. You can then diagnose any adjustments needed based on those learnings to foster long-term success in your trading partner relationship.
It is during the Learn and Validate step that you are capturing the insights from the proof of concept and quantifying those value metrics to warrant a broader expansion. In fact, the proof of concept can actually help to fund a broader deployment. The companies that have executed Flowcasting consistently see higher on-shelf availability capturing lost sales with lower inventories and other supply chain costs.
Extend to Production
The next level is extending the scope to production. For example, if you are working with one trading partner, expand the scope to all of the items you have with that trading partner. You should develop milestones for the production and execution of that implementation, and find criteria for longer-term trading partner expansion. We have seen this with every single trading partner with which we have worked, they have wanted to expand based on the value they have gotten. You create a milestone plan for how and when you are going to expand, not only within the trading partner relationship, but within your broader community of trading partner relationships.
Sustain and Enhance
The final step in the journey map is what I call Sustain and Enhance. Collaboration is an active process. You want to make sure that as you are expanding to a critical mass of volume, you are taking those critical mass insights and translating them into tactics for your broader production, distribution and replenishment plans and inventory policies. Active collaboration helps do that.
You are also looking for ways to enhance how you are doing business with your trading partners. You may start out with a smaller subset of things and simulate the flow with that trading partner. You may then get into more detail around simulating the network or supply chain parameters for delivery frequency that will drive incremental joint value. There is a whole menu of things that trading partners can enhance. We recommend the crawl-walk-run approach with a subset of those simulations and then expand and enhance those over time.
SCN: Thank you for all of your insights on Flowcasting, Fred.
Readers can access the full series on Flowcasting by clicking here.