Je suis étudiant depuis le début de l'année universitaire 2006-2007 du master distribution et relation client à Dauphine. Je tenais à vous transmettre cette article paru dans Supply Chain Europe, un magazine anglais.
French academic makes the case for taking forecasts out of the hands of sales people
We often look to the learned for leadership; clever people are a great source for clever ideas.
Régis Bourbonnais, who runs a Master's course at Paris-Dauphine university, has been writing about retail forecasting and promotions management for almost a decade; he's the author of a whole series of books on the subject.
But it's clear from the moment he starts speaking that his passion for the science of forecasting remains keen. It takes a bit of chutzpah to use the word 'science' in connection with retail forecasting; many argue that it's more of a dark art.
With Bourbonnais around, though, twentieth-century wisdom along the lines of 'If you have a hunch, buy a bunch' goes out of the window. The man has formulae and theorems coming out of his ears.
Forecasting is an important activity, he confirms, and can be a lever for profit. "It's something that's very dear to me," he adds with eyes briefly closed, a downturned mouth and several small nods of the head, like a Burgundy connoisseur on tasting a first sip of a new vintage of Hautes Côtes de Nuits and finding it lives up to ail expectations.
But improving the quality of your forecasts is more difficult in retail than in other industries and it's this that he seeks to apply his scientific knowledge to.
If you interview shoppers in a supermarket, you will immediately see a discrepancy between the items people say they've come to buy and the goods they've put into their trolleys when they reach the checkout, the academic explains.
The reason is pretty obvious: if consumer products manufacturers and their retail partners are keen on promotions, it must be because these exercises work - they entice shoppers into buying goods they don't really need. Promotions, with their intense focus on targets and shifting large volumes of a product quickly, are the big problem for large retailers in Bourbonnais's opinion.
He continues: "One of the first things retailers need to do is separate completely their forecasting activity from sales targets. It's fine - I'd go so far as to say it's healthy - for a business to keep its targets and its forecasts separate. Otherwise, you run the risk of contaminating your forecasts."
Conflict of interests
This leads Bourbonnais to ask who needs to take responsibility for forecasting in a retail company. In companies he's studied, he says it's often the supply chain and logistics professionals who take charge, which he says is fairly logical.
Much more surprising is when it's the sales and marketing people who take the lead on forecasting. He regards them as being in a poor position to forecast because they have targets; it can lead to a conflict of interest.
In a perfect world, all three areas of the business would work together on forecasts, but Bourbonnais knows the world is not perfect.
And he suggests that this may be just as well. "To have the best possible quality of service in a retail store," he explains, "you'd need perfect forecasts and very high stock levels. That means, sometimes, there's no point in overinvesting in a forecasting system because who can afford to have very high stocks?"
So perfection may be out. But that does not detract from his argument that most businesses can, and should, "stay close to demand" and improve their forecasts.
Safety in numbers
And don't talk to him about safety stock, which for Bourbonnais is about knowing which items are difficult to forecast and hardest to find supplies of at short notice.
Much of the safety stock retailers keep represents a big waste of money, he insists, and this is where payback from investing in forecasting technology can come.
He gives the following example. If a company has eurolbn in stock, safety stock will probably account for 20% of that. The result of improving forecasts by between 25% and 30% could lead to a 10% improvement in safety stock, which translates into a saving of euro20m, for what the academic calls a comparatively small improvement.
He adds: "People have suspected for some time that improving your forecasts can make you money, but now you have proof."
"One of the first things retailers need to do is separate completely their forecasting activity from sales targets."
Régis Bourbonnais, Paris-Dauphine University.
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