Forecasting Process Improvement

When customers want it NOW, you have three choices:

1. Carry larger inventories.

2. Hand the problem to your suppliers.

3. Improve your forecasting.

Number 1 adds costs. Number 2 is not available for many suppliers, such as overseas. Number 3, by contrast, offers a win-win combination of near-term savings and no extra demands on suppliers. Yet, too many retailers, frustrated by past failed attempts to improve, simply "live with" unreliable forecasts and their costs. In the bargain, they also forego an excellent opportunity to learn more about their customers and about the effectiveness of their own marketing programs.

Research Boston isolates and quantifies the causes of uncertainty in customers' demand for your products, then helps you develop ways to address them.

Diagnosis

Typically, our work begins with a diagnosis, to isolate and quantify your sources of forecasting error and to determine the drivers of demand for your products. Often the uncontrollable sources, such as the national economy, rank lower than factors unique to your business, such as the timing of your promotions. This analysis serves several purposes:

* Focusing people's attention on the high-leverage areas for improvement.

* Uncovering assumptions about customer behavior that may be inaccurate.

* Identifying important information flows that can improve forecasting accuracy.

Implementation

Research Boston tailors an improvement plan for your unique needs and capabilities. Example implementation strategies range from setting up creative "early warning" systems, to controlled marketing tests, to statistical models that quantify the factors affecting demand, to redesign of ordering and replenishment practices. During implementation, we work with your people to assure the careful attention to design detail that builds management confidence in using forecasts to plan the business. Throughout, we help you learn how to think about your business in new ways, so that you can continue to evolve your approaches to forecasting.

The bottom line of better forecasting:
You provide a better level of service, more efficiently.

Assess your company's forecasting process

To help you assess your own company's forecasting, we have prepared a self-scoring quiz, which will give you a benchmark against other companies we have known.

Quiz:  Signs of unreliable forecasting