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The Art And Science Of Collaborative Planning At CES
Michael Aguilar is widely known throughout the consumer electronics industry for his global supply chain initiatives on behalf of one of the world’s biggest companies – Panasonic U.S.A., where he had direct oversight of corporate strategic initiatives involving sales, marketing, supply chain and logistics. He brings this broad perspective to his role as a Conference Session Chair at the upcoming Consumer Electronics Supply Chain Academy (CESCA) at International CES on January 8, 2010 in Las Vegas.
Aguilar’s CESCA workshop, entitled “The Art and Science of Collaborative Planning and Forecasting,” is of particular importance in a business environment of reduced inventories and hyper-time-sensitive promotions.
Currently President of the Intrepid Consulting Group, LLC, which is located in New York, Aguilar is involved assisting a variety of industries in producing high levels of accuracy in forecasting demand, replenishment, and maximizing “right product – right location” in their supply chain, as well as those of the customers. In his Panasonic days Aguilar was recognized for his pioneering development of a vendor-managed inventory program utilizing offshore resources to predict demand and supply – a first in the consumer electronics industry.
Aguilar recently spoke with CESCA Conference Chairman and Pepperdine University Professor, Devendra Mishra, on the the state of supply chain management in consumer electronics and what’s ahead for the industry.
Knowing the firm believer you have been of POS-driven decision-making, what strides have been made by the consumer electronics industry and what are the low hanging fruits?
Ask any CE company if they are using POS and of course the answer is yes. But dig a little deeper and ask what are they doing with the information and you’ll discover that most are not really using POS as an integrated part of forecasting.
The lowest hanging fruit is to allow a sales rep to validate his or her forecast utilizing the latest POS. Of course this is not the most scientific or accurate tool, but it provides the beginnings of a demand driven forecast. The next logical step is to create a demand-shaping tool that allows the current POS data to be used to model future demand.
How would you assess the retail’s ability to provide timely and accurate POS data to suppliers for efficient replenishment?
If this question were asked a year ago the answer would have been a definite yes – there is a lot of POS data that is being shared. But look at the changing nature of CE with regional chains now on the rise, and becoming more important to every supplier. That is where the weak link is – rapid expansion and systems that need to catch up are not readily in place with many of the regional players.
What are the opportunities for collaboration in the consumer electronics industry?
I think that to truly collaborate you need to get down into the weeds, which means that you can’t look a single rolled up number by SKU. You need to become an expert on collaborating at the region or DC level with each retailer – in essence becoming the second set of eyes. Everyone wants their product to sell well, but if you can’t collaborate on where to place that product you’re only creating half a collaborative effort.
In your opinion, what is the most effective way to get sales, operations and finance to coordinate the development of a forecast?
There is only one way to break down the walls – everyone needs to have skin in the game. What that means in this instance is that compensation programs need to be aligned with the same goals and it’s amazing how quickly coordination happens.
We talk of supply chain management yielding system-wide minimization of cost. What has been your experience in achieving such a goal?
The unfortunate part of almost all supply chain initiatives is that estimated savings are generally forecasted due to the improvements of the supply chain group. In almost every instance, the cause and effect relationship on other strategic areas of the business are never really analyzed beforehand. Consequently – at the end of the year – one group may in fact have created savings at the additional expense of another, or the perceived speed up created by the supply chain group may have taken the flexibility away from another – that had been in place. In reality very few companies take a holistic view of the entire operation prior to a supply chain implementation – this is due to so much compartmentalization within companies.
What will the supply chain of the CE industry look like in five years?
I believe radical changes are on the horizon. First we need to take a lesson from the DVD and music industry – direct to store deliveries are coming as retailers hope to reduce their costs. Direct to consumer deliveries on larger items may also be in the future as retailers strive to have zero net owned inventory. So collaboration then moves a step further into the weeds – down to the store level – and we all need to begin preparing for that now. Most retailers are not good at this level of granularity, so it’s going to be a long learning curve for suppliers.
For more about the fourth annual Consumer Electronics Supply Chain Academy (CESCA), January 8 in Las Vegas, NV, click here.
Today's M&E Connections
• Sony Plans Its Own Online StoreAt an event in Tokyo yesterday, Sony offered a glimpse at a would-be iTunes rival that would sell movies, music, books, and other downloadable applications for mobile products. By Business Week
New numbers from Nielsen show Facebook trailing only YouTube and Hulu in monthly video streams. In October, Facebook attracted more than twice as many unique video viewers as Hulu. While videos on the social network skew more toward the short-form and the user-generated, Facebook has tested TV episodes, such as the pilot for the show “Community” from Hulu co-owner NBC. By NewTeeVee
“The Twilight Saga: New Moon” will probably sell about $90 million worth of tickets this weekend in the U.S. and Canada and could exceed $100 million, according to the Los Angeles Times. That would make the film the second-largest debut of the year behind “Transformers: Revenge of the Fallen,” which collected $109 million its first weekend. By the Los Angeles Times
IFC Entertainment and Netflix have struck a streaming partnership that gives the online movie rental service U.S. rights to 53 indie films. The IFC titles become available for streaming on televisions and computers today. Additional titles will be added on an ongoing basis. By Variety
Opponents of Google’s settlement with groups representing authors and publishers will have a comment period in which to file objections, and books rights holders who want to preserve their abilty to sue Google for scanning their books will have an opt-out deadline. The final hearing is set for February 18 in U.S. District Court for the Southern District of New York. By CNET
Michael White comes to the satellite TV provider from PepsiCo, where he served as Vice Chairman and CEO of PepsiCo International. By Bloomberg
Like many retailers, Trans World has been challenged by this year’s recession. Nearly all its store categories dropped from last year, including home video and videogames. Overall comparable store sales fell 9%. Declines in the retailer’s DVD/Blu-ray and videogames, among other categories, however, were less than the industry as a whole. By Video Business
Verizon Communications CEO Ivan Seidenberg says Hulu is a six month wonder and that technology will ultimately bypass the current fascination with the online video service. “When you think of the change, look at Hulu and the dialogue and debate, and you say, O.K. this is in for the next eight to twelve months and in two years it won’t matter because the world will have moved on.” Seidenberg was one of the speakers this week at the Paley Center for Media’s annual conference in New York. When asked at a conference session about the evolution of the TV business – Verizon operates relatively new entrant FiosTV – Seidenberg said he had no problem paying retransmission fees because it is, “The cost of entry and we have to absorb it. You don’t enter an industry and not play by the rules.” However long term, the Verizon chief said it was an avoidable cost. “It’s all transitional, all the games the media guys play.” By Broadcasting & Cable
Although sales of Blu-ray discs will be insufficient to fully offset DVD’s decline in 2009, UK research firm Screen Digest says that the high-definition format has the potential to return the overall market for packaged video media to a growth position in 2010. Screen Digest expects the number of dedicated Blu-ray players to reach 18.4 million worldwide by the end of 2009, while more than 27 million homes will have a PlayStation 3. “Well over half” of the Blu-ray install base is outside North America, according to the firm. By SiliconRepublic
Walmart will be rolling out a $78 Magnavox Blu-ray Disc player on Black Friday, staying true to its billing as the low-price leader. The retailer also will sell a large number of $2 catalog DVD titles, including “Casino Royale,” “Hellboy II,” “I Am Legend,” “Blood Diamond,” “Underworld” and “Spaceballs.” By Video Business
Mesa Events
Maximizing Efficiencies and Minimizing Risk in the Global CE Supply Chain
(in association with CES)
Co-located with the EMA Video Game Supply Chain Council Meetings
(in association with Entertainment Merchants Association)
February 11, Burbank Marriott Convention Center
Building the Bridge from Physical to Digital (in association with DEG)
(in association with DEG and co-produced by Futuresource)
September 23-24, 2009
Millennium Gloucester Hotel, London
Blu-Con 2.0 2009
The 2nd Congress of Blu-ray Innovation
(Presented by DEG)
Beverly Hilton, Los Angeles
Esty Speaks at ESCA 2009
