Anaplan streamlines and coordinates various tasks and processes involved in new product introduction (NPI), including demand forecasting, sourcing and procurement, and resource planning. The goal of Anaplan is to help ensure a smooth and successful launch of the new product.
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Transcript
[Music]. Bedford Consulting spotlight video. In this video, we’re looking at the ways that Anaplan can support new product introductions for demand planning and forecasting within the supply chain planning use case. If you require an in-depth demonstration, then please get in touch using the contact details available at the end of this video.
For those of you who might be new to Anaplan, it’s a cloud-based connected planning platform used to model every aspect of supply chain planning and SNOP, financial planning, workforce requirements, and more. New product introduction or NPI is an excellent example of how Anaplan can perform the forward planning and scheduling of items to support capacity planning, financial planning, and scenario modelling where the items are not yet created within an ERP system. The ease of use for the demand planner in creating and setting up the new items, coupled with the flexible modelling and ability to sync back to the system of source, make this an extremely powerful tool for supply chain planning.
NPI is a notoriously difficult task for demand planners for a number of reasons. Firstly, since no actual history exists on the new items, the task of priming the initial forecast is often very manual and requires lots of effort to reiterate changes. Secondly, forecasts are often needed at higher levels of aggregation than just skew, for example, to provide manufacturing or suppliers with advanced requirements to plan capacity at the category level. Finally, there is often the need to model outcomes and scenarios, including all NPI products for the next year prior to them being created in the system of source. In this circumstance, planners either need to postpone their planning until the items are set up or work with so-called dummy items that come with their own set of problems.
In Anaplan, all of these issues are addressed within the memory of the cloud platform. Here we see a new product introduction dashboard. The demand planner can start by hitting the button to create a new product. In this pop-up box, we can give the new item a relevant name, but note that this name is not fixed forever. It is simply the display name. In fact, the item will have a unique code within the database, meaning that if at a later date the new product finishes setup and the actual name is known, this field can be edited to sync between the systems. No need for the creation of dummy items.
We then select a like product on which to baseline the initial forecast, i.e., we use that item’s demand history. This model assumes the planner knows which product to select, but it is also possible to create dashboards that correlate different products by attribute and demand to suggest products to use. Note as well in the drop-down that this is a setting up of a skew at the lowest level, but the same process could be performed at any level of the product and regional hierarchies, then aggregated or disaggregated accordingly.
Here we can set the launch date and some of the attributes for the new item. Our model wants to financialise the plan, so we set the average selling price and the cost of goods sold. But your model could be customised to include as many attributes as necessary, for example, minimum order quantity, order multiple, unit of measure, weights and dims, anything that is relevant to your business.
Once the new item is in memory, we can now easily make adjustments to the new forecast. Our chart shows in dark blue the forecast of the like product, skew double zero one. We now need to tell the system how to factor that forecast for the new item. That is done here using the ramping profile selector. We know that the demand isn’t going to hit the ground running at the same rate as the established old item, but do we think that it will ramp up to maturity very quickly or over a longer time horizon? When I select this mid-range profile, we see the new product forecast appear on the chart, but that profile is managed here in the user-friendly ramping profile grid. The purple fields indicate that I can manually overwrite these values to create the ideal profile, but conversely, these profiles could very easily be generated systematically by taking actual history from previous NPI launches.
The next step is to factor an increase or decrease relative to the old item, keying in a new percentage value. Again, changes our chart and financial grid information. Following this, we consider the inventory policy of the item that will be affected by the supply chain planning, and I’ll return to this point in a moment.
Another great feature of this dashboard is the ability to consider not just the creation and establishment of the new item but also to consider its impact upon the wider business. Cannibalisation occurs when one item negatively impacts the demand of another, so when we launch the newest and greatest product, we might expect that demand of the older and more dated product might reduce. Within this grid, we can check the box to apply a cannibalisation factor to skew double zero one, of which we have baselined the new item, and model the impact of varying percentage factors.
Setting the inventory policy allows us to consider what the stocking strategy for this new item should be, for example, upholding a service level, setting maybe a particular quantity to be held in stock, or in this case, holding a number of weeks of supply.
The final step is to sync to history. Remember all of those attributes that you’ve set up at the creation of the item? Well, a great benefit of Anaplan’s NPI process is the ability to now sync all details of the product setup back to your ERP or system of source. This could be done immediately or at any point in the future but means that Anaplan can be used to template the product data that is fed into the ERP, saving lots of manual effort that is often needed to complete all relevant fields.
This then completes the NPI process, but remember that with Anaplan’s version creation and scenario planning functionality, any number of variations of this forecast could be simulated, and the scenarios compared as part of a consensus planning or S and OP process.
I hope you enjoyed this video, a new product introduction. If you’d like any more information, please do contact us, and we’ll be happy to help.
