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In the past, Subaru made ordering decisions at its corporate headquarters based on previous sales data it received from its five U.S. regional offices. Like other automakers, Subaru used a formula based on past sales and anticipated market demand to determine the amount and models of vehicles to order and allocate to dealers. The process was less than perfect, however. For example, if dealers in a particular area were selling many black Outbacks, headquarters would order more black Outbacks for those dealers. What headquarters often didn't account for was that those dealers sold so many black cars because they had an abundance them on their lots. Headquarters didn't know whether buyers really wanted different models or colors.
How do you break this cycle? - Get more detailed forecasting data from the field. The company determined that its 36 district sales managers must have greater input into ordering and allocation decisions because they worked directly with dealers and best understood the inventory that dealers needed.
Subaru needed to turn a top-down process around and build it from the bottom-up. However, House says the company's spreadsheet-based forecasting method wouldn't work with the district sales managers because the task would be too cumbersome and time consuming in order to provide useful information.
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