The acronym VMI seems to gone out of fashion but whether it is pure VMI - Vendor Managed Inventory these days or not that pure, the major supermarkets are putting more and more emphasis & more resources to getting their product forecasts right first time.

The problem is that, like forecasting the weather or the uptake on Manchester United prawn sandwiches, predicting the future is not easy despite what some people think. If you look at the way a previous promotion performed say a 3 for 2 Soap offer then you need to factor many specifics into that result. What was the weather like, what other brands were on offer and where, did you advertise on TV and if so how long for? – the list is endless. Put this against the unwritten assumption that many large supermarkets expect their suppliers to have rubber-sided warehouses to hold infinite pallets ready and waiting just for them, 24 hours a day.

One answer to this problem is not new but still ignored by many; work as closely with your customer as you possibly can. Spend as much time as you can in their offices or premises, understand how they work & what makes them tick. What are their main worries, what are their main KPI’s or measures? Ask them how you can help them, share your data with them and understand what their own data is & where it comes from. Of course their time and yours is precious but prioritise workloads.

Some large companies have had their employees (or implants as they like to call them!) based & working in their major customers for many years. Walmart in the US and Asda Leeds do this with many suppliers.

And the SAP and Bluefin relevance to all this? Both SAP and SAP BI contain huge amounts of rich & detailed data which can be modelled for future trends against historical performance. It can be presented in countless formats and targetted to the appropriate levels of your business. It could provide the missing link in why that new promotion didn’t sell as well or explain why your largest customer ran out of stock on the 2nd day of a 14 day promotion.