...In MTS (Make to Stock), products are manufactured based on demand forecasts. Since accuracy of the forecasts will prevent excess inventory and opportunity loss due to stockout, the issue here is how to forecast demands accurately. MTS (Make to Stock) literally means to manufacture products for stock based on demand forecasts, which can be regarded as push-type production. MTS has been required to prevent opportunity loss due to stockout and minimize excess inventory using accurate forecasts. In the industrialized society of mass production and mass marketing, this forecast mass production urged standardization and efficient business management such as cost reduction. As an economy expands, the income of consumers increases and so demand also continuously increases. Demand changes according to the boom and bust cycle of the economy. Even if demand decreases and inventory increases, inventory will turn into cash one day when demand recovers. Therefore, the main theme of business management is how to predict the future based on the demand fluctuation cycle of the past. In specific, the development of a production/inventory management system is needed to improve management efficiency by, for example, setting safety stock, optimal production, and ordering points based on lead times of material procurement, production, and delivery as well as demand forecasts. If demand can be accurately forecasted to some extent then there is no problem in creating a forecast production schedule...
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...To explain the value of his relationship with outsourcing and offshoring firm Cognizant, Kimberly-Clark chief information officer Ramon Baez recalls a conversation he had with one of its on-site consultants who rattled off such an impressive string of business metrics that he had to stop her to ask how she knew his business so well. "I remember asking the young lady presenting to me how much she knew about what goes on inside Kimberly-Clark," Baez says. "Because I was thinking, 'Wow, she's really knowledgeable.' And she told me, 'Oh, I've been on the project from the beginning. Yeah, that's how we do things.'" Baez had joined Kimberly-Clark in early 2007, shortly after the engagement with Cognizant started, so he hadn't initially realized the extent to which members of the project team were the same people who had come in to study Kimberly-Clark's operations and put together the vendor's initial proposal. That struck him as remarkable partly because of his experience with other outsourcers at prior jobs. "I've seen these vendors have a fantastic proposal team, and the reason the company wins the proposal is because of the people on that team. But then as soon as they've got it, those people move off to another contract, and you get someone you have no relationship with to run the actual project," he says. Because Cognizant has proven willing to make a serious investment in understanding Kimberly-Clark's business as well as its information technology needs, the $18.3 billion...
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