Marketing Case

In order to cope with the problem, Yankee Fork and Hoe should improve the lines of communication between marketing and production department regarding the preparation of forecasts. For example, previously, forecasting system preparation is based on only sales and marketing department when they conduct the meeting, the production department should take part in the meeting to provide relevant information about raw material on hand and production schedule, plus making comment on what could be or could not be done for the anticipated demand. Moreover, the meeting should conduct at the end of each month because monthly forecast for the whole next year period is not enough; both departments should adjust the anticipated demand monthly to avoid unexpected changes in the economy and shortage of the raw material.

The Marketing division may not be optimistic. The problem of delayed delivery may come from the Production itself (Low productivity).

It is viewed that the delay delivery problem was not caused by the too-optimistic monthly forecast from Marketing Department but the low productivity of Production Department. Currently, the final-assembly schedule relied on "adjusted forecast" that we could obviously see that the current production is not sufficient to serve our customer order.

The production capacity seemed not to be a problem as rake head and bow could be produced 7,000 and 5,000 units per day respectively, compared to the highest sales record in the last 4 year (month 11 year 1) at 83,269 units.It seemed that the inappropriate inventory management was the major factor causing the unproductive production.

In order to be able to deliver all customer order without any obstruction, the following ways were suggested:

- To track and gather the real demand of Top 5 - Top 10 customer who were influential to total company sales and set the minimum stock to at least be able to serve such customers since the current excess demand might be occurred from one of this group.

- To negotiate and revise the raw material order with existing suppliers. The annual committed volume method is recommended given that company could solve the fluctuated demand problem and might get the higher discount from the high volume order. Also, finding prospect suppliers could mitigate the supplier concentration risk.