Demand Forecasting for Dynamics AX Thank you for the opportunity to meet you today and to introduce Adaptable Solutions and Microsoft’s premier ERP software product Dynamics AX. Our objective today is to gain a good understanding of what you require for your companies: What are the key issues Your point of difference Timeframe Budget Anything else you regard as important

Fully integrated AX module Demand Forecasting Demand forecasts Sales orders Transfer orders Purchase Production Master Planning Total integration – enter information once!!

Key features Forecasts can be calculated automatically or entered manually Graphical view for comparison of forecasts and demand history Adjust forecasts either online, or offline using Excel Full support for key Dynamics AX item dimensions Designed to manage large volumes of data Built within AX using X++ development language

Release 4.0 - New Features Weekly forecasting Multiple demand sources, including dependent demand Collaborative forecasting (consolidation of adjustments made offline by multiple people) Generation of budgets from forecasts Flexible OLAP reporting to compare demand history, forecasts and sales budgets with user-defined groupings of customers & items over multiple levels

Forecasts can be automatically calculated or manually entered Items are grouped for ease of maintenance Customers are grouped to consolidate demand and improve forecast accuracy Forecast at any dimension level

Forecasting and Item Dimensions The Item Dimension ‘levels’ at which forecasts are generated are configurable. Here is an example: The level at which forecasts are automatically calculated or manually entered Sales Invoices Demand Forecast Calculation Final Demand Forecast Item  Site Warehouse Configuration Colour Size The level at which forecasts are required by Master Planning In this case, the final forecast is pro-rated from the calculated forecast based on demand history ratios

Collaborative Forecasting Forecast Sales Groups specify who manages forecasts for each customer Forecasts can be adjusted online, or offline using Excel

Forecast Item Groups Forecasts are always calculated by item Forecast Item Groups consolidate data For viewing Adjustments may be made at group level Adjustments are pro-rated down to items

Abnormal Demand Ability to flag abnormal demand For example an abnormally large order is received from a customer to stock stores for a sale You want to adjust the demand history to prevent future forecasts being inflated Manual adjustments are always held separately from actual demand history

Promotions Ability to enter the likely impact of promotions for forward planning A promotion may drive up sales in a period, but reduce sales in a subsequent period Promotional adjustments are held separately from calculated forecasts

Product Life Cycle Start of Life Copy history from a similar or superseded item End of life Manually determine when the run-out should occur Disable item from being forecast Copy history to a new item

Forecasting Formulae Same as last year’s demand +/- n% n-month moving average n-month moving average with trend Average of same months last 2 years Average of same months last 2 years with trend ‘Best fit’ formula selection using the Forecast Pro forecasting engine

Forecast Pro Formulae Simple Moving Averages Discrete Data Models Croston’s Intermittent Demand Model 9 Exponential Smoothing Models Univariate Box-Jenkins Model Event Models 4 Curve Fitting Models Dynamic Multiple Regression

Other Features Forecast periods Forecast accuracy Forecasts are calculated by week, month or user-definable periods Monthly forecasts can be automatically split into weekly forecasts (or even further if required) using period keys Forecast accuracy Multiple forecast models enable a forecast to be frozen and compared to actual demand over the forecast period Fully multi-lingual capable English language labels are shipped with the product Other language labels to be developed by resellers

Demand Forecasting Roadmap Display of total item forecasts over all customer groups User selection of Forecast Pro formulae Forecast exception tracking Automatic detection of abnormal demand history Extensions to collaborative forecasting to track who made changes Extensions to the OLAP cube Description of each point: The module currently displays item forecasts by Forecast Customer Group and, optionally, Forecast Sales Group. We will be providing a summary enquiry screen showing item forecasts totalled over these groups for information purposes only initially. Demand history adjustments must currently be entered manually – this will provide a detection of abnormal demand history, or ‘Outliers’, together with recommended adjustments that can be easily confirmed or rejected. Currently only the latest forecast figures are displayed even if they have been altered multiple times by different people. With collaborative forecasting especially, this can be a problem where, for example, a figure altered by a sales rep is overridden by a manager. This will provided visibility of all adjustments made to forecasts and who made them. We currently provide access to the advanced formulae used by the Forecast Pro engine only under the ‘Optimised’ formula option. The formulae options will be extended to enable selection of individual formulae. There are industry-standard formulae for calculating safety stocks based on demand variability, forecast accuracy and lead time variability. We have been requested to include such calculations in the module. The AX Safety Stock Journal technically provides this but there are problems with it and it doesn’t include calculation based on forecast accuracy. OLAP extensions are inevitable and will include MAPE calculations based on selected Forecast Models (currently only available for the current model).

Demand Forecasting for Dynamics AX www.adaptable.co.nz Or email Adaptable Solutions at dynamics@adaptable.co.nz