Establish and implement an event calendar to improve accuracy!
The demand for many products and/or the dramatic increase in demand for many products is related to a special event. For example, most Coke product purchased in Mexico is purchased on Friday, which is payday in most areas in Mexico. Most large appliances in Rochester, New York are purchased on bonus day at Kodak. Mother’s Day is one of the busiest days for the telephone companies.
The timing of these special events is typically known well in advance of the event itself. The impact on demand of these events is easily predictable from the impact patterns in previous events. That said, a good forecasting system should have a built-in event calendar that automatically tracks and forecasts for these special events.
In the example from the healthcare industry, for many products, the manufacturer, wholesale distributor, and healthcare provider each carry several weeks of inventory for the same item. For many of those products the demand is tied directly to surgeries that are scheduled eight or more weeks in advance, which is more than the manufacturing lead-time for many items. Simply incorporating the surgery schedule in the forecasting and supply chain scheduling process permits the elimination of 30% to 40% of that inventory.