Identify changes in forecasting methodologies and approaches (for practices such
ID: 450898 • Letter: I
Question
Identify changes in forecasting methodologies and approaches (for practices such as contracting, advanced payments, outsourcing to fix a price, continuous and fixed budgeting, simulations, or regression analysis) that have been influenced by current economic conditions.
Has the current economic environment changed your organization's forecasting approaches to logistics within the supply chain?
If so: Describe at least one new approach that is a specific result of the changes in the current economic environment. How is this change unique to these times? Will these changes help to maintain your organization's competitive edge?
If not: Would you recommend the implementation of new forecasting approaches? In what ways might a continuation of past techniques and approaches be dysfunctional? Briefly describe one specific new approach you would recommend.
Explanation / Answer
The current economic conditions have forced organizations to rethink the forecasting techniques. Companies opt for upward integration, downward integration and so on to have a better control on the supply chain. Other practices such as contracting, advanced payments and so on have become the norm too.
Even our organization has taken decisive steps to combat this changing environment. The idea is to have partners. Strike up a relationship where we keep a balance of both parties sacrificing something to gain something far greater.
Our organization is in the datacenter business where we need servers at regular intervals. Servers cost a lot so it becomes expensive to buy them time and again. Due to budgetary constraints we cannot buy in bulk or cannot store many servers. We purchase servers as the need arises. So to try and plan our purchase we struck a deal with the vendor. We will sell his servers to our clients and others as well; in return of which he sells servers to us at a reasonable cost. This is unique as when we sell his products to someone else we do not gain much from the transaction apart from good faith. But, the idea is to use that good faith to our advantage. However, one feels that this strategy will help in holding the competitive advantage for a short period. Something unique needs to be thought of again to continuously hold the competitive advantage.