Background

Background to Odette FAI

The following problems have been experienced in the area of forecasting accuracy:

  • Lack of¬†information and transparency in the supply chain results in consequences such as the Bullwhip effect
  • Forecast information quality is low and there are no common KPI:s to help maintaining good communication about problems
  • Global replenishment and long supply lead-times increases the problems as forecasts and needs are changed with short notice
  • Suppliers are forced to increase safety stock or keep over capacity in order to handle fluctuating and uncertain demand

Improving the forecast accuracy will give positive effects for the value chain, here shown in the “3-CEP Model” (blue>green):

3CEPs