Communicated Changes to Your Forecast. Check.
In a previous customer newsletter, we shared information with you about the five things your annual forecast influences regarding Alexandria Industries. It is one of the most crucial pieces of information we need from you.
Customer forecasts drive our business planning for the year. This includes planning our production capacity, capital investments, operational changes, raw material supply, and logistics resources. Your annual forecast gives us the information we need to prepare these items so we can effectively and efficiently support your production needs throughout the year.
We also need to know any time you anticipate or experience changes to your forecast. To help you understand the impact that changes could have on our business, we outlined certain factors to consider that can change your forecast. The reason we ask our customers to provide their forecast and share any potential factors that could change it, allows us to plan ahead, while also being able to make adjustments when needed.
It is imperative to compare your forecast against your actual purchase orders. Track the progress made with your purchasing plans and any changes to your forecast, quarterly, at least. Keep a running list of things that changed your forecast so we have an opportunity to make adjustments in your purchasing plans or in our business plans for the future.
When you notice things change and your forecast is higher or lower than anticipated, communicating changes with your account executive as soon as possible, may provide you with an opportunity to create solutions that will get you back on track with your original plans, or readjust.
Schedule a meeting/call
Open communication
When needed, we will also work with you to make adjustments to your forecast and plan around your revised needs.
We realize that some factors, like the weather, can unexpectedly impact your purchasing plans. When plans change, let your account representative know as soon as possible. The sooner we become aware of your changes, the sooner we can work on creating a solution that best meets both of our needs. When adjustments need to be made, it is also important to keep the lines of communication open. This way, we have all the latest information we need to make properly informed decisions about any changes on our end.
- Plan raw material supplies to take on additional production increases
- Keep spare capacity
- Think ahead regarding building, equipment and employee needs
- Conduct data analysis to understand our production volumes and needs
- Provide flexible logistics
- Forecasting lessons learned – cites examples where we have learned something key regarding a customer who tracks its forecast, and made adjustments accordingly in a way that suits both our businesses
- Timely communication at every appropriate level is key – purchasing, engineering and operations
- Others???
Solutions:
The Ordinary and the Extraordinary – Our capacity levels can, and do, fluctuate. These fluctuations may be a result of market adjustments, political maneuvers, or broader industry issues, such as a major worker shortage or significant product recall. The question then becomes, “How do we adjust to these changes?”
- Typical production overtime
- Volunteer overtime available to non-production employees
- Constant continuous improvement efforts
When was the last time you compared your purchase orders for the last month, or quarter, against your forecasted purchases? If you don’t know, or it has been longer than three months, it is time for a forecast check-up now.
- Describe how to compare your purchases against your forecast?
Summary:
Even if you’re not a city driver racking up all kinds of highway miles, check your forecast like you would change your oil. Choose a specific production quantity amount, amount of time, or other criteria to indicate that it is time to compare your actual purchase orders against your forecast. Doing this regularly will provide a solid foundation for us to rely on to meet your production needs.