Quintiq DemandPlanner ThoughtWorthSharing
We are now in a global crisis due to the COVID-19 virus. It has become a pandemic and severely interrupted supply chains for all industries. The impact of this interruption will be with us for many months. Suppliers who supported manufacturers may not be able to survive the effects of the pandemic. Demand from customers may take time to ramp up to pre-pandemic levels. Employees who have been either furloughed or laid-off will need to be brought back. In effect, the entire supply chain may be altered because of the COVID-19 virus. Our customers may therefore depend on us to suggest how the DELMIA Quintiq Demand Planner application can support their efforts to get back to “normal.”
Enterprises have never encountered a supply chain environment remotely similar to the one in which we now find ourselves. Therefore, we need to be creative in developing solutions that can address the challenges faced by our clients. At some point, the crisis will end and then our customers will require our applications to support their efforts to bring business back to “normal.” How will we be able to best support these efforts?
Our customers will face several challenges once this pandemic is over. These challenges will include:
- How best to use history to generate a proper and reliable statistical forecast.
- How best to reflect the ramp up of demand during the immediate post pandemic period.
Adjustments of Historical Time Series Data
Under normal business circumstances, historical data has always been a significant factor in generating forecasts. Unfortunately, the period encompassing the COVID-19 pandemic should not be used a basis for determining statistical forecasts. The statistical forecast models need reliable and consistent time series data to generate projections of demand. Using the 2020 historical data to project future demand is not appropriate since a repetition of the COVID-19 impact has very low probability of re-occurring.
The observed demand quantities occurring during the pandemic time-period should therefore be considered as outliers.
The outliers that may occur during the pandemic time-period will be different from those encountered in the past. In the past, most outliers have been singularities; a single value for one time-period. Outliers that occur over an extended time-period cannot be resolved in the same manner as singularities. Therefore, the challenge after identifying outliers is in determining their resolution. There are several suggested alternatives in DELMIA Quintiq Demand Planner for resolution. These include:
- Adjust the historical data identified as outliers with the previous year’s data for the same time-period.
- Adjust the historical data with the consensus forecast prior to the impact of COVID-19.
Our DELMIA Quintiq Demand Planner team will be providing instructions on how to accomplish the above recommendations.
Ramp up Demand Post-Pandemic
Once the pandemic has passed, customer demand may NOT immediately go back to normal. Manufacturing constraints, available work force and inventory positions will be factors that affect how quickly operations can get back to normal. There will most likely be a ramp up period and its trend will depend on the duration of the ramp up. The demand during this intermediary period will depend on its length. The challenge will be in forecasting the demand quantities during the ramp up.
DELMIA Quintiq Demand Planner has the functionality to project demand during the ramp up period. The Event functionality is able to use a demand profile to generate a statistical forecast for the ramp up. This profile can be the basis for generating forecast for a number of products, groups of products or the entire hierarchy of products. The ramp up forecast should be considered the starting point or default value for projecting demand immediately after the post pandemic period. The Planner, by exception, can then adjust the forecast for the appropriate periods. Similar to the outlier identification and resolution effort, our DELMIA Quintiq Demand Planner team will be providing templates to support this process.
The functionality suggested above are NOT enhancements to DELMIA Quintiq Demand Planner. They are part of the existing functionality of the application and therefore not part of the release timing. We will present specific documentation in the very near future with procedures, templates and examples.
Elliott Mandelman
Product Manager – DELMIA Quintiq Demand Planner
April 2, 2020
