- Revenue: $90,000,000
- General Description: Manufacturing
- Geographic Location: Midwest
- Markets Served: Automotive
Founded in the 1940s, this 3rd generation, family-owned business is a world-class manufacturer of stamped metal parts and value-added assemblies. Leveraging its fully integrated supply chain solution, the company reduces risk and complexity for the customers it serves.
Despite the company’s robust business planning process, it was seeking a way to improve the accuracy of its revenue forecasting process. Previously the company had relied upon RFQ planning volumes, historical analysis of volumes shipped, and feedback from its sales team and customers.
With the rapid changes taking place in the auto industry, the company lacked a granular understanding of the OEMs, programs, models, and application ratios for the parts they supplied. Further, as a Tier 2 supplier, the company lacked the ability to react quickly to market events and anticipate changes in volumes based on start-of-production (SOP) and end-of-production (EOP) dates.
JACO Advisory Group (JACO) implemented its proprietary sales forecast model that utilizes a 3rd party data source and provides the company with a five-year view of its revenue at the program level. The model provides the company with 24 monthly revenue forecasts plus three additional years of annual revenue projections. The company is now able to understand end customer and sales sub-segment concentration levels.
Further, the sales forecast model provides the company with data to:
- Validate customer-supplied forecasts utilizing OEM planned production rates.
- Provide reliable data so that the company can accurately maintain its capacity models.
- React quickly to market events that affect its revenue and margins.
- Improve its sales planning process based on knowledge of parts building out years in advance.
Additionally, the company can run variance reports, forecast revenue based on annual cost reductions, and quickly update revenue forecasts based on new business won.
Upon successful implementation of the sales forecast model, the company changed its sales planning cadence from a yearly activity completed to support the annual business plan, to a monthly activity. Forecast accuracy improved, and the company can now have proactive, data-based conversations with its stakeholders instead of reacting to adverse events affecting its revenue.