The Lean manufacturing, PPT Plus,
"Back-to-Basics" e-Training Package 
Lean Manufacturing Solutions

Increase the effectiveness of your
Lean Manufacturing Training Program
Lean Manufacturing Simulation Game 

You Will Need Some Information

You will need to keep a file on promotions, price changes, Marketing actions, and the like. If you don't currently keep such records, start now. You'll likely be able to get this information from your Sales or Marketing staff. You'll need to keep track of dates, product lines or items offered, terms, and discounts offered. This doesn't need to be high-tech. I keep it on sheets of legal paper in a manila folder.

You'll also need to keep seasonal index files organized by month, location, product line, etc.—whatever's appropri­ate to your business. My predecessor had the foresight to start accumulating this information, and I am blessed by having records back to the mid 1970's. If you don't have this kind of data now, you can start. Your MIS department may be able to write a program or report designed for this task, or you may be able to get the data from current reports, such as a Stock Status, or the like, or existing programs. Look around to see what you have and talk to your MIS staff.

But why keep all this paper? So you can really see what happened—the effect on promotional periods, the periods after and before, and be able to tie the numbers to your file of promotion dates. Armed with this data, you will clearly be able to see the effects of the promotion not only during the promotion, but the periods before and after, as well.

If the Sales force knows that a promotion is coming, in my experience, orders in the period immediately before the sale date will drop to just the minimum required to prevent customer stockouts. The promotion peaks will occur—one peak for the customers who bled their inventories down very severely will hit early in the program, and a second peak at the end of the promotion for those who were better stocked at the start of the sale, but waited until the last minute to stock up on as much as they could at the lower price. When the promotion is over, demand will invariably tumble, because the distributors are now well-stocked.

When you examine your own seasonal history, you may discover a pattern of promotional behavior at your com­pany, which may or may not be like ours. But now, you will certainly have a much better idea of what to expect. Don't let reality beat you in the head with a board—adjust the seasonal!ty in the periods before and after the promotion at the same time that you forecast the promotion itself!

Also (and I honestly just had this happen), Sales and Market­ing folks who've been around the company for a long time tend to say things like, "we might have spikes like the ones back in '81 and '82." If you have your handy file, you can go back and see what kind of spike they're talking about. If your file doesn't go back that far because you're just starting, you'll likely be able to find history with at least some similarity. At least then, you'll have a starting place for discussion. If you don't have any records, you're just plain out of luck.

To be Continued