{"id":1319,"date":"2012-01-18T16:26:44","date_gmt":"2012-01-18T21:26:44","guid":{"rendered":"https:\/\/demand-planning.com\/?p=1319"},"modified":"2012-01-18T16:26:44","modified_gmt":"2012-01-18T21:26:44","slug":"ibf-discussion-group-on-linkedin-changing-sales-forecast-in-the-same-month-and-why","status":"publish","type":"post","link":"https:\/\/demand-planning.com\/2012\/01\/18\/ibf-discussion-group-on-linkedin-changing-sales-forecast-in-the-same-month-and-why\/","title":{"rendered":"IBF Discussion Group on LinkedIn: Changing Sales Forecast in the Same Month and Why?"},"content":{"rendered":"
\"Mike<\/a>

Mike Gilliland AKA: The BFD<\/p><\/div>\n

For those of you on LinkedIn<\/a>, be sure to sign up for the Institute of Business Forecasting and Planning <\/em>discussion group<\/a>.\u00a0 This is an active (and addictive) forum for sharing information and perspectives on a wide variety of forecasting & planning topics. The following question was posted by \u00a0Reno DiGenova, the VP \u2013 Replenishment, Inventory & Demand Planning at Geneva Watch Group, and has garnered 27 responses:<\/p>\n

What are your thoughts on changing sales forecast in the same month and why?<\/em><\/strong><\/a><\/em><\/strong><\/p>\n

The more general question is: \u00a0Should you ever freeze your forecast?<\/p>\n

It is definitely appropriate to freeze a forecast at some point for measuring forecasting performance<\/em>. (Otherwise, we could wait until the actuals came in and always hit 100% accuracy.)\u00a0 The usual practice is to freeze the forecast at supply lead time \u2013 that is, the point after which you can no longer impact supply in the period being forecast.\u00a0 For example, \u00a0if the supply in February cannot be adjusted after January 31, forecasting performance for February would be based on the forecast as of January 31.<\/p>\n

A more contentious question is: Should you ever change your forecast within the supply lead time? Or going back to our example: Does it make sense to change the February forecast in February, even though you can no longer impact February\u2019s supply?<\/p>\n

Elif Kotman and others on the blog point out a benefit of changing the forecast within supply lead time: \u201cEven though the Supply Chain may not change the production or purchases for the current month anymore, they can adjust the planned volumes\/quantities for periods in the further future.\u201d This is reasonable as long as you have a high degree of certainty in the change, and that the change is significant.\u00a0 Small changes are inconsequential so why waste time on them?\u00a0 Frequent changes terrorize and add nervousness to the planning systems, as Scott Roy and Tommy Jorgensen pointed out in the discussion.<\/p>\n

Another situation is when you can make changes to supply within the forecasting bucket.<\/p>\n

Many (perhaps most) organizations plan supply in weekly buckets, even though they do sales forecasts in months. Richard Watson makes a strong case for weekly forecasting, \u201c\u2026because it enables 52 data points in the year creating a clearer definition of the demand pattern, allowing the organization to be more dynamic, while at the same time simplifying tracking and monitoring mechanisms.\u201d Aligning forecasting and planning buckets also avoids the messy conversion between months and weeks.<\/p>\n

Join IBF\u2019s discussion group on LinkedIn, and make these conversations a regular part of your working week.\u00a0 And if that is not enough, join us in Scottsdale, AZ (February 26-28) for the IBF Supply Chain Forecasting & Planning Conference<\/a> which includes:<\/p>\n