Frequently Asked Questions:



  

 




What is the benefit of Flostock Demand Forecasting?

Flostock will provide a realistic demand forecast that you can use for production planning, capacity investments, resource planning, purchasing, acquisitions, budgeting, target setting and many other things that companies normally do with their sales forecast. Some customers say the main benefot is INSIGHT. Flostock will help you understand your supply chain, up to the very end consumer. And show how your market share has developed over the past 5 or 10 years. More benefits can be described in a personal visit. Benefits for DSM have also been described in an article in the European Coatings Journal and in an article in Chemistry Today. 

What is the Flostock approach?

We help you identify the route cause of a problem by  asking "Why?", and again "Why?" and if needed again. The route causes are then brought together in a revolutionary model of your business environment. The model calculates the combined effects, including feedback loops and delays.  

Does Flostock forecasting also work in a volatile economy?

Flostock's methods work at its best in volatile circumstances. This is different from practically all competition. Reason is that we include the cause of the volatility as a driver in our models.

What is a "Systems View"?

Having a Systems View means looking at a problem not in isolation, but including its context and the route cause of the problem, and the secondary effects that any measurements will have. This was eloquently described by Peter Senge in "The Fifth Discipline". The tool to use for such System View is System Dynamics. 

Can Flostock do an analysis of my suppliers, so of my upstream supply chain?

Yes this is possible. This can e.g. be usefull if you want to determine whether certain critical components will be short in case of bullwhipping. This can also be done for parallel supply chains that deliver critical components for your downstream customers.

Can we benefit without coordinating with all other players in the chain?

Yes. By having a more reliable forecast, and by better understanding the cause of changes in demand, be it end market, stock building in the chain, own market share growth, competitor problems, an individual company can better anticipate and plan stocks, capacity, labor force, purchasing and pricing actions. You do not need the cooperation from other companies for this. 

Can the future be predicted?

  • Yes, as far as the cause of events in the future has already started today. Examples:
  • ** Day & night, the seasons, monsoons, the weather, the tides 
  • ** Climate change.
  • ** Factors like the population pyramid.
  • ** Penetration of a new technology in a market follows a certain pattern
  • ** Cycles and waves, e.g. the Lehman Wave. For a wave the wavelength and amplitude can be described and modeled. Also the combination (interference) of the Lehman Wave with the economic cycle.
  • ** A change in end market demand of which the effect will, due to delays in the chain, arrive at your level later.  
  • Flostock modeling

 

 

What is the smallest unit for which Flostock demand forecasting makes sense? Will it also work for a single SKU (stock keeping unit)?

The unit should at least have several transactions per month. If it is smaller, individual decisions will determine the outcome too much.

Can Flostock demand forecasting be used for any industry? Any specific characteristics?

It works for industries that are involved in physical streams of goods. And in many cases it will work for their service providers as well, if that service is proportional to the physical stream. So it not only includes the producing industry, but also distributors, transporters, freight airlines, ports, temporary workers.

Is there a regional limitation in the Flostock demand forecasting?

No, provided enough market information is available. It will work less well if the region is too small.

Can Flostock also forecast the financial or stock markets?

Give us a call if you are interested in this.

Can Flostock predict a new crisis?

No (not yet) and certainly not the Black Swan-type of new crises. But once a crisis has started, we will estimate how the new crisis affects behavior, this will be incorporated intop the models and from that moment on the Flostock models can predict the development of that crisis. We have described this in our newsletter no 6.

What is System Dynamics, the software used by Flostock?

System Dynamics was developed in the 60ies at MIT for analyzing situations with stocks and flows and feedback loops with delays. In recent years its use has been simplified enormously, so it is now as easy as an Excel spreadsheet, but graphical. More and more students learn it as part of their curriculum. See e.g. John D. Sterman, “Business Dynamics: Systems Thinking and Modeling for a Complex World”, MIT, 2000. Flostock uses proprietary software based on System Dynamics.

Is it a lot of work for my company to obtain a model from Flostock?

We can start with a so-called Proof of Concept, at low cost, fast and with little effort for your company. In second instance we will do a couple of workshops with some of your experts. We know that all our clients are limited in resources, so we will restrict this as much as possible.

Can Flostock forecast prices?

Yes, for as far as prices are the result of the supply/ demand balance, and especially for large volume products with strong capacity restrictions. We issued a brochure about this.  The Flostock models are very suitable for calculating S/D. This will work especially well in a free market, so not in a monopoly, government-controlled or kartel situation. Give us a call if you are interested in this.

My sales volumes fluctuate over the months of the year, with strong seasonality. Can Flostock forecast this fluctuation?

Yes, probably. Give us a call if you are interested in this.

Can Flostock forecast demand for transport?

Yes.

The Flostock Models have shown to be very useful in a crisis situation. Are they also useful outside of a crisis?

Yes; also in a stable situation is it relevant for a company to know its end market and how that end market translates into her demand.

How long does a Flostock project take?

A Proof of Concept can be finished within a month. Building a full, 100% working model will take another 1 to 3 months, depending on the complexity and the availability of data.

Does the model generate One Demand Forecast or multiple different demand scenarios?

The models can be used for scenario planning. By entering different levels of future end markets into the model, different scenarios can be tested. It is also possible to depict various theoretical future crisis situations and determine how they would affect a company's business.

Are other factors not influencing my demand, besides stocks and end market demand as used in the Flostock models? E.g. the interest rate, consumer confidence etc.

All these factors may have an effect, and we call them drivers. We endeavour to identify and include at least 90% of the drivers that contribute to the demand of a company. The smaller drivers, the ones that play only a small role in your demand, can be ignored.  

Contact Us:

Telephone: +31(0) 6 11356703

Email: info@no-spam-today-flostock.com

Website: www.flostock.com

 

Postal address: Kempischebaan 200, 5552 KE, Valkenswaard, The Netherlands

Visiting address: Wolput 35, 5251 CC, Vlijmen

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