Establishing Sales Forecast Process Map for a Medical Devices Manufacturing Company

A global medical device company specializing in manufacturing sterilization machines approached us to establish a forecasting process map. The objective was to ensure timely raw material planning and provide accurate forecasts to subcontractors for efficient production scheduling. Here's a breakdown of the steps we took to develop the process map:

Step 1: Understanding the Business Model

The company sold machines to three regions (APAC, EMEA, and America) through a bidding process. Each sales opportunity was treated as a project with a 12-18 month delivery lead time, depending on project scope.

Step 2: Identifying Stakeholders

Approximately 29 account managers were responsible for various hospitals worldwide. To streamline the S&OP process, we designated a single representative for each region.

Step 3: Determining the Planning Bucket

To balance cash flow and inventory levels, we considered two key factors:

• Lead Times: Critical items with a 4-month lead time influenced the minimum planning horizon.

• Cash Flow: Projects with delivery timelines exceeding 9 months were excluded from immediate purchase plans.

Step 4: Selecting a Forecasting Approach

Given the project-based nature of the business, historical data was unreliable. We opted for a project-by-project approach, considering factors like client relationships and probability assessments.

Step 5: Developing the Final Process Map

A detailed process map was created, outlining the demand planning process, stakeholder responsibilities, and functional roles. This map served as a foundation for implementing S&OP and fostering collaborative planning.

Step 6: Implementing the Staircase Report

The Staircase Report was employed to track forecast accuracy on a project-by-project basis. This tool helped account managers, engineers, and project teams assess the impact of forecast changes on project delivery and performance.

The result of our efforts were tremendous as it setup a way towards collaborative planning within company and efforts were combined to ensure customers' satisfaction is achieved at the highest level.