Forecasting demand-management distinctions:

The guy with the Palm Treo in your local Home Depot store may just be checking his email while he picks up something to fix up the basement—or he may be part of the demand-management process at San Rafael, Calif.-based Kelleher Corp., a lumber and molding products supplier to Home Depot. A once laborious and slow paper-based order-entry process, notes Paul Herzog, Kelleher's VP of marketing, has been replaced by an electronic process that uses a mobile bar-code reader and inventory-management solution from 3G Touch Solutions and Socket Communications. As a result, a replenishment process that took up to 10 days has been transformed, with Home Depot's shelves being restocked within 24 hours."One of the things that distinguishes demand management from demand forecasting is moving downstream to capture demand sooner, taking customers' real-time inventory levels into account," notes Kiron Shastry, a demand-planning specialist for New York-based Accenture. Being closer to customers' real inventory levels, he adds, acts to reduce uncertainty and boost forecast accuracy and responsiveness.Not to mention boosting cash flow. The old system, says Herzog, involved a Kelleher sales rep creating a replenishment order on a multipage preprinted form, and handing it to a Home Deport employee who would fax it to Kelleher headquarters—and then manually type it into Home Depot's own systems.
A single version of the truth it most certainly wasn't. "If the two orders differed, there would be payment delays because what we would ship wouldn't match what they thought they had on order," says Herzog.No longer. Today, the Kelleher rep downloads a store-specific inventory profile as he enters the store, and scans each inventory location with a Palm Treo that costs around $600—including scanner. When the order is complete, he goes to the computer room at the back of the store, gets a purchase order number, and plugs the Treo into a serial cable that issues the order to Home Depot's system. Moments later, the exact same order is sitting on Kelleher's system, awaiting fulfillment.