Many firms have no strategy for dealing with unforecastables and some even pretend that all items are statistically forecastable. Statistical tests need to be used to identify those articles which cannot be forecasted with conventional techniques, such as intermittent demand and demand with high variances. For example, low volume and erratic demand may indicate...
Dr. Jain (Chief Editor of the IBF’s Journal of Business Forecasting), and I have recently been collaborating on an article that is a wake up call for Planning organizations to have their house in order so they can recognize the signals for an economic recovery. I am a proponent for completeness and integrity of...
It is bad enough that consumer behavior is never 100 percent predictable, but the unpredictable behavior of management also compounds forecasting errors. Over the years I have relived the following situation so much that it has almost become a predictable behavior. Once a month, among my many forecasts, I submit a 30/60/90 day outlook...
DOW up, DOW down; oil prices spike, oil prices spiral down; jobless claims up, jobless claims steady!! The news is full of contradictions. Is it the start of recovery after what was termed the greatest economic crisis since the Great Depression or are we still in the midst of a perfect storm? We think...
Who defines and says what are best practices? The person speaking? The loudest voice? The person with the most expensive shoes? The person with the most impressive degree? Maybe it is the highest paid consultant? We hired a consulting group and have implemented what we believe to be a best practice consulting group. In...
No matter where you place the forecasting function, you will have a bias in forecasts unless you create an independent department. Production people tend to over-forecast because it gives them fewer headaches resulting from out of stocks. But if they are evaluated on the basis of inventory, they would prefer under-forecasts. Salespeople have a...
I always look forward to the IBF’s annual Consumer Products & Retail Forecasting Forum. It gives me a chance to validate the direction we are taking our own forecasting and demand planning processes. There were many different themes that came out of the IBF Conference. The one that resonated with me the most was...
If you listen to the buzz about S&OP at an IBF Conference, you will hear a repeated theme. This seemingly endless refrain is recited by Planners, Vice Presidents, and everyone in-between. You all know the words, so say it with me, “If you want S&OP to succeed, you need Senior Management’s support and ownership.” ...
Folks, it is with great pleasure to welcome all of you to the IBF’s Blog! I don’t know why it has taken us so long to get here with the amount of content, knowledge and experience we have to share in Demand Planning, Forecasting, and the Supply Chain. But, we’ve arrived and now full...
This is my first posting to the IBF’s new blog, and I’d like to express my thanks, first of all, to you, the readers and also to Anish Jain of the IBF who invited me in. Okay, let’s get to work. Are you ready for a horror story? It ranks right up there with...