I interviewed Cheng Hwee Sim who discussed Demand Forecasting and Sales Analytics.







It’s good to speak with you today, Sim. I’m looking forward today to hearing your views on demand forecasting and sales analytics. Could you first provide a brief background of yourself?


I’m an operations researcher. What that means is, I use mathematics to solve problems. I’ve been doing that in the Singapore Ministry of Defence long ago, but for the past 19 years, I’ve been doing this on a commercial basis.


Good. Can you give a definition of what demand forecasting and sales analytics are?


This software space is populated with companies like SalesForce.com, SIBO, CRM, SAP, and so on. Basically, every business needs to have an idea what is in its pipeline, how it forecasts what the sales are going to be like in the next week, the next month, and so on. One part of it is to do with forecasting and demand; the other part of it is how to organize your sales team to manage this sales process.


How is it done effectively?


Well, it’s not done very effectively in many companies. Let’s talk about the forecasting part. Forecasting, if you notice, many companies, they will be talking about a forecast at the monthly level, and a forecast given by the sales organization is actually not necessarily based on clear understanding of the market, but, rather, it’s a reflection of what the sales team thinks it can lend in terms of sales. As you know, if your sales target is too low, management is not going to like it, so, usually, sales forecasts tend to be on the high side.


Demand forecasting by supply chain professionals, production people, and so on is a different kettle of fish altogether. They need to know exactly what’s going to be sold, what orders need to come in so they can get the sufficient inventory ready and also to make sure their production is done efficiently. We do see that sales forecasts and demand forecast by supply chain and production to be rather different in many companies.


Can you talk about where you’ve seen some success with this?


Well, many companies use this kind of software to identify their needs to manage the pipeline of needs, the conversion of needs to customers, and so on. These software out there do provide the means to see what the pipeline looks like and to organize for the pipeline. It also allows you to slice and dice, to understand what kinds of customers you have, and it’s generally good for understanding who your customers are and how you can get new customers, but it’s not very good for managing repeat business or stream revenue.


What’s unique about your business?


As mentioned, we specialize in analytics. In the case of forecasting and sales analytics, what you will see in most is the ability to visualize a lot of things, to slice and dice data, but that’s what we call descriptive analytics. What we’re offering is going into the area of predictive and prescriptive analytics.


Maybe if you’re not familiar with this term, basically, descriptive is to basically explain what’s happening, but prescriptive is going into “What if I run this promotion?” or “If I have this sales team with me, how can I organize them so that I can achieve more?” things like that. Prescriptive is telling you what you ought to do, but that’s not what most of the software out there can do.


Do you have any recommendations for supply chain managers who are looking into these issues regarding sales analytics and demand forecasting?


We suggest you take a good look at what we call customer-product-level order data. In other words, which customer is ordering what specific product. At the customer-product level, the data is always intermittent. Most companies would not deal with demand at that level because it’s the finest level, actually, but that’s the level the sales team deals with all this. They have to know who is giving an order for what product. We would advise companies to get down to this level of detail, and we have found a lot of benefits in getting down to this level of detail.


Thank you, Sim, for sharing today on demand forecasting and sales analytics.


Yeah, welcome.





About Cheng Hwee Sim



Cheng Hwee Sim

Managing Director, IDSC Pte Ltd


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