Secrets to a Short and Happy Life
If you wake up one day in an industry where 90% of your products’ revenues are generated in the first three months, you don’t have enough historical data to generate an accurate statistical product forecasts, and your global sourcing and manufacturing networks create long lead times with high supply variability, congratulations, you have probably landed in the electronics sector.
Welcome to a business where turning out the next “must have” new product generates excitement and almost half of failures are due to initial misreads of market expectations. According to Gartner, in general, only 65% of forecasts are accurate and 75% of new products fall short of forecast expectations.
So what’s the secret to a short but happy and profitable product life? Better demand planning and multi-echelon inventory optimization (MEIO).
From a demand planning perspective, companies that do a better job forecasting demand tend to enjoy advantages like: