Consumer product manufacturer Procter & Gamble is implementing Terra Technology’s Real-Time Forecasting system to improve customer value, increase supply chain stability and improve inventory management.
Procter & Gamble (P&G) is live on Real-Time Forecasting (RTF) in Europe and plans to roll the software out globally over the next two years.
P&G says that it has been able to reduce short-term forecast error by over 30% and anticipates more than a 10% reduction in inventory. Dick Clark, associate director of demand planning for P&G, said that the firm selected the RTF system as part of its supply visibility program to improve short-term forecast accuracy, cutting inventory and increasing cash flow.
According to Terra Technology, RFT monitors daily demand signals and uses pattern recognition to generate a significantly more accurate forecast. Because the forecast responds to what is happening currently rather than just historical trends, forecast error is typically reduced by 50%. This decreases inventory by as much as 20% without compromising service levels.