Point of sale data and beyond: part 2
Editor’s note: this is the second of two parts. Read part 1.
What about data associated with capacity and the ability to promise orders? If a customer calls and requests 10,000 pieces of product X, can customer service respond immediately with all the applicable availability, time and requirement answers? What if your products have a short shelf life? These are all critical to your forecast.
What about external data such as weather? Planalytics – a great company run by some outstanding ex-Air Force badasses – provides highly accurate and detailed weather info. Some are using the data to help with seasonality and impact on big sales days such as 4th of July. Now companies can profitably tackle formerly esoteric questions such as “How much more beer will we sell if the temp is 100 instead of 80?”
But even all this only scratches the surface of the minute and critical indicators available within Planalytics’ functionality. There’s still demographics, raw material pricing, market capacity…the list is endless, but also critical to answer as these indicators provide huge value for forecast accuracy in the short, medium and long term. Few applications are set up to fully take advantage of everything offered. This is the essence of the data conundrum.
So which side of the problem do you attack first to impact revenue in a positive way? Ideally, both. It will ever be our position that a holistic approach that marries detail with high-level strategy and the very short term with the long term is always going to provide the most value to an enterprise and its bottom line performance.
However, I think professionals are best served by being honest with what they really have to work with and then building from there – so if POS data is available on a weekly basis and it is not being used, then focus on taking advantage of the POS; learn the possibilities and build from there (invest in the correct applications). If however, you and POS are old friends, then tackle the other side, start to invest for the future by following tracks laid by companies like Best Buy and Sony, who are executing complete and real-time data sharing. If you platform yourself correctly, not only can you get ahead of the data curve, but you’ll be armed with a unique competitive weapon: the ability to approach your retail customers and say, “I know how you can optimize the dollars generated from each square foot of your stores and distribution centers.”
Hmmm – helping each partner of your value chain maximize their efficiency and profitability…Now there is something that can positively impact your EBITDA both for the long term and in a way that allows for competitive differentiation- and all of it tied to a focus on improving forecasting and demand planning.