NPI – New Product Introduction

September 30, 2013/in Applications, Knowledge Hub, Oracle Demantra, Supply Chain Planning /by Trinamix Team
Demand Planners occasionally need to add new products to the product assortment, and are responsible for ensuring these items are populated in Demantra as well as receive a statistical forecast. New product introductions have defined lifecycle phases, which includes:

• Product introduction

• Product maturity

• Product phase-out

In many cases, newly created items replace one (or more) existing items. During the introduction period, sales are expected to increase while sales for items being replaced are expected to decline. For a product no forecast is desired before the introduction period or after the phase-out period.

Depending on the type of product being introduced, generating a useful forecast for items and locations with little or no history can be challenging. Traditionally, Demand Planners used manual forecasting and “best guess” methods to determine a demand plan. However, this method can be time consuming and unsuitable for large scale day-to-day planning processes.

Another method of generating a forecast for items lacking history is to use information from other sources. In contrast with user-derived forecasts, which rely on user expertise and judgment, this process attempts to use reliable analytical forecasting methods. In this approach, additional historical information is retrieved and used as pseudo-history for the combinations lacking real history. When selecting pseudo history for an item one or more data streams are copied from an item deemed similar. User expertise is used when defining the data sources from which history is copied. The pseudo history is used for predicting future behaviour of the combination until combination specific information is available.

For example, a sports drinks manufacturer wants to introduce a new flavour, Grape. Even though this product is new, it will have very similar demand to other flavours of sports drink. By associating the new flavour with an old one, Demantra can use the existing forecast to predict sales for the new product.