|Home | Training | Services | Testimonials | Contact | About Us|
|Demand Forecasting & Planning: Improvement Programs|
Improve Forecast Accuracy with effective Forecasting Methods
Sales forecasting is a critical process that affects business and supply chain planning throughout the entire company. Forecast Solutions is happy to help with any individual component of the forecasting process to improve forecasting accuracy and we are well qualified to undertake and end to end review of all processes and forecasting methods. We can help ensure best use is made of any existing forecasting software, but can recommend new tools if such are necessary. If company resource is limited we can provide an ongoing forecasting service to help with regular updates in your forecasting system or supply a full outsource of the forecasting process.
Understanding the current state
The first stage is to understand the current sales forecasting system in terms of scope, process and forecasting methods. As well as the mechanics it is useful to understand the intent that lead to the current state and the views of all participants on the strengths and weaknesses that prevail. In terms of currently achieved forecast accuracy, this should be measured on a meaningful basis. A forecast accuracy health check is often useful at this stage.
Critical assessment of the existing system
All parties should then step back and critically assess the current system. It may be that a process installed with due diligence some years ago no longer meets the full business need. A system designed to support short term planning might not adequately fulfil the needs of medium term planning such as those involved in a sales and operations planning process.
Identify and test improvements
Potential improvements should be discussed and prioritised. Of great importance is the organisational and procedural framework within which sales forecasting will be carried out. Effective forecasting usually involves many individuals both inside and outside the business and the necessary collaborations must be supported by the forecasting process. Proposed changes should ideally be tested before implementation.
Implement and monitor
The agreed changes should be implemented. Appropriate forecast accuracy measures should be put in place and regularly monitored as part of a drive for continual improvement. When setting KPIs it is best not to worry too much about industry benchmarks. Rather, focus on the accuracy that is currently achieved and strive to improve steadily over time.
Sales forecasting software
Obviously there are practical considerations including the often large investments that may have been made in forecasting software, but software should ideally be regarded as a tool to support sales forecasting, not something that defines the process. At the end of the day it may be necessary to consider additional or replacement software.