Demand Management Technology Produces Results

A study of consumer product companies shows better market share and profit margins.

Consumer products companies that use best-of-breed demand management technology saw increases in their market share and gross profits according to a new study by Aberdeen Group Research. One reason for these good results is that companies using forecasting systems are three times as likely than their competitors to have forecast accuracy above 70%. The report entitled "Demand Management in Consumer Industries," focuses on technology strategies for managing demand.

"Our research shows that technology solutions that enable collaborative demand planning, demand shaping and product lifecycle forecasting help companies significantly reduce inventory and improve gross margins," said Nari Viswanathan, research director, supply chain, at Aberdeen Group. Aberdeen's study also found that "nearly half of the [consumer industry] companies surveyed report that they are challenged because their supply chains do not have normal demand distributions, making traditional forecasting difficult."

Aberdeen also credits two specific types of capabilities with helping consumer products companies improve performance on key business metrics --promotion optimization and demand collaboration (working collaboratively with internal staff members and customers to achieve a consensus forecast).

For this report, sponsored by Belmont, Mass.-based SmartForecasts, Aberdeen surveyed 150 consumer industry companies, including consumer packaged goods, apparel/footwear, consumer electronics, consumer durables, pharmaceutical manufacturing and food and beverage enterprises.

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