Impacts of adaptive collaboration on demand forecasting accuracy of different product categories throughout the product life cycle

Abstract

Purpose – This paper aims to empirically analyze how adaptive collaboration in supply chain management impacts demand forecast accuracy in short life-cycle products, depending on collaboration intensity, product life-cycle stage, retailer type and product category. Design/methodology/approach – The authors assembled a data set of forecasts and sales of 169 still-camera models, made by the same manufacturer and sold by three different retailers in France over five years. Collaboration intensity, coded by collaborative planning forecasting and replenishment level, was used to analyze the main effects and specific interaction effects of all variables using ANOVA and ordered feature evaluation analysis (OFEA). Findings – The findings lend empirical support to the long-standing assumption that supply chain collaboration intensity increases demand forecast accuracy and that product maturation also increases forecast accuracy even in short life-cycle products. Furthermore, the findings show that it is particularly the lack of collaboration that causes negative effects on forecast accuracy, while positive interaction effects are only found for life cycle stage and product category. Practical implications – Investment in adaptive supply chain collaboration is shown to increase demand forecast accuracy. However, the choice of collaboration intensity should account for life cycle stage, retailer type and product category. Originality/value – This paper provides empirical support for the adaptive collaboration concept, exploring not only the actual benefits but also the way it is achieved in the context of innovative products with short life cycles. The authors used a real-world data set and pushed its statistical analysis to a new level of detail using OFEA.