Mark A. Moon - Demand and Supply Integration: The Key to World-Class Demand Forecasting

The Key to World-Class Demand Forecasting

Mark A. Moon

FT Press

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Mark A. Moon
2013 by Pearson Education, Inc.
Publishing as FT Press
Upper Saddle River, New Jersey 07458

This book is sold with the understanding that neither the author nor the publisher is engaged in rendering legal, accounting, or other professional services or advice by publishing this book. Each individual situation is unique. Thus, if legal or financial advice or other expert assistance is required in a specific situation, the services of a competent professional should be sought to ensure that the situation has been evaluated carefully and appropriately. The author and the publisher disclaim any liability, loss, or risk resulting directly or indirectly, from the use or application of any of the contents of this book.

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Printed in the United States of America
First Printing January 2013

ISBN-10: 0-13-308801-4
ISBN-13: 978-0-13-308801-4

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Library of Congress Cataloging-in-Publication Data

Moon, Mark A., 1955
Demand and supply integration : the key to world-class demand forecasting / Mark A. Moon.
p. cm.
ISBN-13: 978-0-13-308801-4 (hardcover : alk. paper)
ISBN-10: 0-13-308801-4 (hardcover : alk. paper)
1. Supply and demandForecasting. 2. Management. I. Title.
HB801.M6923 2013
338.5210112--dc23
2012043608

Based on his nearly two decades of supply chain research and consulting, Dr. Moon succinctly describes the what, why, and how of Demand and Supply Integration in this book. It is a powerful reference guide for every supply chain leader and practitioner.

Reuben E. Slone, Senior Vice President, Supply Chain, Walgreens

Mark Moon finds the right balance between academic rigor and practitioner relevance as he moves the focus of demand and sales forecasting from the historical realm of statistics to the realm of strategic decision making. This book continues building on the proven best practices methodology previously inaugurated by his mentor and colleague, Tom Mentzer. This is a well-done, forward-thinking, practical guide for business professionals who want to improve their forecasting processes.

Dwight Thomas, Retired, Former Supply Chain Planning Manager for Alcatel-Lucent Technologies

Mark Moon has provided excellent insight in defining the importance of integrating demand and supply into a true business process and demonstrating the top and bottom line impact. This is a fresh viewpoint that can help organizations add value to their current process or to provide guidance for a new process.

Edward Guzowski, Director, SIOP, Eaton Corporation

Moon is one of the leading minds on the rapidly evolving subject of Demand and Supply Integration. In this book he grounds thought-provoking insights on the subject with the abundant use of current, real-world examples from a variety of different industries. A must-read for both the practitioner and the academic.

Nikhil Sagar, Vice President, Inventory Management, Fortune 100 Retailer

Brilliantly organized and an incisive examination of demand-supply integration (DSI) within an organization and across the supply chain. DSI is what S&OP is supposed to be. Professor Moon carefully portrays an ideal DSI process, the stages a company passes through to get there, and the aberrant actions and policies that can undermine it. A must-read for planners and managers and a valuable complementary text in MBA business-forecasting courses.

Len Tashman, Editor, Foresight: The International Journal of Applied Forecasting

Sales or demand forecasting is an enigma for most. Mark Moon, in a very clear and straightforward way, elucidates the discipline and its important business roles. These include not only driving an efficient supply chain, but also its value as a strategic enterprise asset when properly utilized to inform all planning processes, both short and long term.

Dave Pocklington, Vice President, Sales Forecasting & Analytics, Global Strategic Planning, Amway Corporation

To Tom Mentzer, who got me started in this stuff.

To my sons, Colin and David.
I couldnt be prouder of you both.

To Carol, who has made me happier
than I could ever deserve.

I would like to acknowledge three categories of people and organizations as being indispensable contributors to this book: the colleagues with whom Ive worked, the companies from which Ive learned about forecasting and DSI, and others who have played a very special role in the writing of this book.

First are the colleagues with whom Ive worked. Ive already mentioned Tom Mentzer, and he is the first person whom I must acknowledge. Without him, none of this happens. He taught me about forecasting and he opened the doors that needed to be opened to get access to the companies. His tragic death in 2010 is still felt by all of us at the University of Tennessee. His were very big shoes, both literally and figuratively. He was one of the worst golfers I ever had the joy of playing with, and the most generous-spirited man I ever met. I miss you every day, Tom.

After Tom, there were other faculty colleagues who participated in audits, consulting projects, and executive teaching. Ted Stank, Funda Sahin, and Ken Kahn were wonderful colleagues with whom I have worked. Of particular note is my dear friend, Paul Dittmann. Weve traveled the world together, and everything Ive learned about inventory management, and most of what Ive learned about supply chain management, Ive learned from this insightful, hard-working, and dedicated professional. In addition to the faculty colleagues were the doctoral students with whom we worked. We never could have collected all that data from the companies in our audit database without their excellent participation and contribution. Those who come to mind include Carlo Smith, John Kent, Nancy Nix, Brian Fugate, Beth Davis-Sramek, Barbara Marshall, Andy Artis, Marcel Zondag, Melinda Jones, Michelle Bobbitt, Michael Garver, Cliff DeFee, and Shay Scott. All have gone on to various faculty positions around the world, and they were all fun to work with and drink some beer with at the end of those long days of interviews. Particular acknowledgement must go to Marks AngelsDonna Davis, Teresa McCarthy-Byrne, and Susan Golicic. Altogether, those three remarkable women worked with me on about 10 different audits, in various configurations. They abandoned me in Fort Worth, partied with me on South Beach, picked out lingerie in Winston-Salem, and even tried to find me (unsuccessfully) in Dublin. But thats another story. The four of us became dear friends, and we did a lot of great work together learning about forecasting and demand/supply integration.