Forecast Consulting


Background

So much goes into forecasting at companies, and yet there is still a high degree of dissatisfaction with the forecast. Companies continually spend a lot on forecasting solutions, but in reality, the actual use of forecasting systems is poor. Why is this?

The Reasons Are Many

One reason is that companies continue to apply the fundamentals. The fundamentals include the following:

  1. Not hiring and retaining experienced people to be forecast planners
  2. Not understanding that some items cannot be forecasted and must instead be managed by supply planning settings.
  3. Choosing poor forecasting software over-relying upon brand
  4. Not measuring forecast error accurately or in a meaningful way
  5. Failing to remove forecast bias
  6. Not using forecast aggregation
  7. Using forecast aggregation, but not by the correct attribute

Companies want to improve their forecast accuracy, but are doing so many things wrong that naturally the accuracy cannot improve very much. Secondly, the focus on using advanced forecasting formulas has had two effects. The first is that it applies formulas to products for which the forecast has a low likelihood of being improved, secondly the forecasting software fails to apply these more sophisticated formulas because the software itself lacks transparency.

Our Focus

We bring a reality check to forecast improvement. It is heavily systems based as that is our background, but does not place the solution before the business requirements as most the major consulting companies do. We also do not have the blinders that other consulting companies have as we have not built our consulting model around one particular application and can see advantages and disadvantages of different systems. We also don’t think that there is one best system for all clients. Our blog in this area describes our content.

http://www.scmfocus.com/demandplanning/

Diagnosing Systems

The number one thing we do is diagnosing the current areas of forecasting underperformance and providing recommendations for improvement. These recommendations include everything from software changes (For instance, adding third party applications), to changes in how forecast accuracy is measured. We leave clients with both the recommendation, but also the design documents to make the recommendations a reality. We are expert at solution integration documentation and create sustainable content repositories that can be used far after we have left the account.

Our approach is extremely different from most other consulting firms you have worked with. For us, forecast accuracy improvement is easy. The bigger issue is bringing clients along who have fallen into bad practices, have received bad advice and are using antiquated tools and methods for forecast management. However, forecasting improvement projects are extremely interesting for us, because the opportunity is always there.