ESP is all you need to get it right every time. Now back on planet earth we need a slightly better approach. Most of our mobile sales (DSD) customers are after that magic pill that tells them exactly what to have on the truck and what everyone will sell. The problem is that no one can really tell you how to calculate it. The good news is that it is easier to predict what your total volume of customers will buy vs. an individual customer. The law of averages works in your favor. In our adventures in selling direct store delivery solutions, everyone says they want to pre-populate their orders for their drivers and salespeople. Sometimes we are talking about just putting in a shopping list of products that this customer normally buys and then adding the quantities later. Some people want to be a lot more scientific. Often the question of how to calculate the perfect order is met with a stunned silence. What about the scientific approach?
Using some rudimentary calculations it is pretty easy to figure out the average amount of each product that is sold to a customer in an average week or day. We can also calculate the average variance from that average. This gives you something called standard deviation. In the normal course of business, the vast majority (usually 99%) will come within three standard deviations from that average. If you trying to do this for an individual customer you would be looking the behavior of that one guy; that is very hard to predict. If you look at the number for all the customers on your route and break that into days of the week or even weeks of the month, then you have a pretty reliable number. Using this number on a given day and adding three deviations worth of product should ensure that you never run out. Because we don’t start from empty in most cases, it also ensures that we turn inventory over on the trucks. The perfect truck load gives you the ability minimize weight and ensure you serve the customer every time.
Now take that same calculation and expand it for the entire company. This gives you a bigger population of data and therefore a more accurate number. This number can be used to optimizer order quantities and drive manufacturing. All of this from a simple attempt to give your driver a list of products that are likely to be sold to save a little bit of typing. I knew stats class would come in handy someday.
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