The forecast provided to the planning department of future customer demand resulted in the incorrect model mix of stock being stored in the warehouse. As a result of the inaccuracy of the consolidated forecast, additional on-site and off-site warehouse space was required. Production built stock that was not required by the customer due to the inaccuracy of the sales forecast and the purchase order that was provided to production facilities at N-2, to meet current month customer demand.

Forecast analysis revealed a necessity to gain better customer relationship management data and for each sales region to analyse the demand they were requesting. Analysis also focused on the demand requested and purchase orders placed on each of the manufacturing facilities.

It was necessary to change the process from a firm purchase order, being placed on each facility at N-2 and this demand pushed to the finished goods warehouse at current month, to a firm purchase order placed during current month to manufacturing facilities.

Converting push systems to pull systems had the effect of reducing stock holding as manufacturing built in line with customer demand, reduced production cost due to increased demand at current month, reduced customer back order and improved customer service.