Perspectives on Sales & Operations Planning

Does Toyota Need to Forecast? When Lean Manufacturing Doesn’t Work

The relationship between sales forecasting, demand planning, and lean principles has been analyzed, evaluated, and debated for decades.  However, in light of recent market volatility, this debate is final reaching resolution – executives overseeing even the most lean, JIT-focused supply chains, need to planning.

Chris Chiappinelli, a blogger associated with the Managing Automation Blog offers the following :

“Just in Time, in its purest form, is a thing of beauty. Read Toyota’s description of it on their website — it sounds like poetry in motion. But the marketplace doesn’t care for poetry. We don’t want to place our order and watch the gears — perfectly meshed though they may be — smoothly churn out our product. We want our hamburgers pre-cooked and waiting for us under a heat lamp. In that world, Just-in-Time has no place. It’s a museum piece, a relic of a more patient era. In this world of pre-heated hamburgers and mass customization, Toyota and its counterparts are forced to produce not to actual demand, but to expected demand. And that, my friends, not only belies JIT; it creates a huge amount of risk.”

“A New York Times article illustrates just how far from its roots Toyota strayed:Previously, plants operated under the sales force’s direction of “you make them, we will sell them,” said Real C. Tanguay, president of Toyota Motor Manufacturing Canada. Now the philosophy is, “if we can sell them, then you will make them,” he said.”  “Oh, how the mighty have fallen. Who would have predicted that a Toyota executive would ever sum up the company’s philosophy as, “You make them, we will sell them”?”

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Steelwedge enables customers to better understand and anticipate demand through forecasting, collaborative engagement of field sales, and analysis of changes in sales pipeline opportunities.  In today’s world, these are vital processes.

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Tags: Collaboration, Collaborative Planning, Collaborative Sales Forecasting, collaborative sales planning, European Forecasting Consolidation, executive S&OP, OnDemand, steelwedge