Many companies enter expected sales on product, customer or even product-customer level into their ERP system. Some companies do this up to 18 months into the future. When the whole crew of sales managers is monthly filling up a database, bottom up, it seems that the combined level must be reliable because it is based on very careful thinking by people who know their customers best, a bit like crowdsourcing. Problem is that the sales managers do not know what their customers will order, because their customers don’t know either. And the people involved often adapt their detailed forecast to the expected total, then split it up until it fits. Another problem is that it is a lot of work, and it gives the false impression that it is accurate and well supported by the team. And it is only linear, and it does not take the supply chain effects into account. Main problem is that it is sentimental. Advantages of this system? Don’t know. It sounds solid because it is expensive. I’d say that in most cases this can only be used to break up a forecast on total level into customer/product combinations for production planning. Don’t you ever base your capacity expansions on this. I expect that many companies use this because everybody is doing it, it is massive, expensive and sounds as if everything is under control. “Nobody ever got fired for properly implementing a huge and expensive ERP system. “ Or were they?

Tensions around the Crimea are building up, and it may change the relations between Russia and the rest of the world. If you are worried about how this would interfere with the supply of raw materials or finished products to or from Russia, and you don’t know how to quantify it, give us a call. We can build a supply chain model of your business environment, including the supply lines involving Russia and Ukraine and asses in a number of scenarios what possible disruptions would mean for your business. We call it Quantified Marketing, but you could also say Virtual Reality Supply Chain  Modeling.