Introducing the Forecast Demand Time Fence
If you don’t use forecasting this feature is not for you -- but that begs the question: Why don’t you forecast your demand? Maybe your customers give you more than enough time to purchase everything and complete manufacturing of whatever they order whenever they order it? If that's the case, you're very lucky! It's likely the majority of you are not that fortunate.
The forecast demand time fence allows you to control the period of time for which you just want to consider actual independent demand, ignoring forecast. Typically, this is for the short term horizon where you have customer backlog that creates all needed demand. If you have ample customer orders for a period of time, you can eliminate the forecast.
It goes without saying that forecast is wrong -- that's where the demand time fence comes into play. Say you sell widgets that come in red (50%), white (30%) and blue (20%). If you forecast a family of these items for a quantity of 100, you will have individual forecasts of 50 red, 30 white and 20 blue. If the period has actual orders for 30 red, 40 white and 30 blue, you still have orders for 100. Planning says you need 50 red -- not the 30 you have actual orders for -- so the total requirement is now 120 and not the 100 you forecasted. By implementing a forecast demand time fence you can eliminate the forecast for the short term horizon.
The forecast demand time fence is a manufacturing system option where you set up the number of days to exclude forecasted demand. The exclusion is based on the ending date of the forecasted period including any created spread forecast periods. By excluding close-in forecasts, production can focus on what is needed to ship and support safety stock replenishment.