{"id":651,"date":"2010-01-11T07:37:45","date_gmt":"2010-01-11T14:37:45","guid":{"rendered":"https:\/\/demand-planning.com\/?p=651"},"modified":"2010-01-11T07:37:45","modified_gmt":"2010-01-11T14:37:45","slug":"what-management-must-know-about-forecasting","status":"publish","type":"post","link":"https:\/\/demand-planning.com\/2010\/01\/11\/what-management-must-know-about-forecasting\/","title":{"rendered":"What Management Must Know About Forecasting"},"content":{"rendered":"<div id=\"attachment_656\" style=\"width: 131px\" class=\"wp-caption alignleft\"><a href=\"https:\/\/demand-planning.com\/wp-content\/uploads\/2010\/01\/Gilliland-Photo1.gif\"><img loading=\"lazy\" decoding=\"async\" aria-describedby=\"caption-attachment-656\" class=\"size-full wp-image-656   \" title=\"Mike Gilliland http:\/\/www.ibf.org\" src=\"https:\/\/demand-planning.com\/wp-content\/uploads\/2010\/01\/Gilliland-Photo1.gif\" alt=\"\" width=\"121\" height=\"146\" \/><\/a><p id=\"caption-attachment-656\" class=\"wp-caption-text\">Michael Gilliland<\/p><\/div>\n<div id=\"attachment_654\" style=\"width: 164px\" class=\"wp-caption alignleft\"><a href=\"https:\/\/demand-planning.com\/wp-content\/uploads\/2010\/01\/Inte_RodriguezIntel.gif\"><img loading=\"lazy\" decoding=\"async\" aria-describedby=\"caption-attachment-654\" class=\"size-full wp-image-654  \" title=\"Emily Rodriguez http:\/\/www.ibf.org\" src=\"https:\/\/demand-planning.com\/wp-content\/uploads\/2010\/01\/Inte_RodriguezIntel.gif\" alt=\"\" width=\"154\" height=\"145\" \/><\/a><p id=\"caption-attachment-654\" class=\"wp-caption-text\">Emily Rodriguez<\/p><\/div>\n<p>Are there some things you wish your organization\u2019s management knew about forecasting?\u00a0 Those of us who have served time in the forecasting profession know that \u201cserving time\u201d is an apt description of the job.\u00a0 Being a business forecaster is sort of like being in county lock-up \u2013 without the benefit of free meals, charming bunkmates, and periodic delousing.\u00a0 Forecasting is difficult \u2013 we never seem to forecast accurately enough to please management.\u00a0 And forecasting is thankless \u2013 even when we come up with good models that forecast reasonably well, someone above us is likely to change the numbers to whatever they darn well please.\u00a0 Those forecasters that aren\u2019t already on mood altering substances probably should be.<\/p>\n<p>What the forecaster really needs, are the tools to educate management, and forecast as accurately and efficiently as can reasonably be expected given the nature of your demand.<\/p>\n<p>There are four main reasons why forecasts are wrong:<\/p>\n<ul>\n<li>Unsound or misused software<\/li>\n<li>Unskilled or inexperienced forecasters<\/li>\n<li>Politicized forecasting process<\/li>\n<li>Unforecastable demand<\/li>\n<\/ul>\n<p>The best accuracy you can achieve is limited by the forecastability of your demand patterns.\u00a0 So accuracy expectations have to take that into consideration.\u00a0 The na\u00efve forecasting model is the proper baseline for accuracy objectives, and industry benchmarks should never be used to set accuracy targets.<\/p>\n<p>New product forecasting is an area of particular angst.\u00a0 Managers realize that these forecasts are usually way off, yet they forge ahead with supply and revenue plans in full confidence.\u00a0 We suggest that assessing uncertainty and risk is more useful than forecasting alone.\u00a0 When management has a good understanding of the likely range of new product demand outcomes, the organization can better align resources to all the possibilities.<\/p>\n<p>We also support Forecast Value Added (FVA) analysis \u2013 a method now used by many major organizations to identify forecasting process waste and to achieve better forecasts.\u00a0 FVA evaluates every step and participant in the forecasting process, identifying those that are not adding value by making the forecast better.\u00a0 Many process activities are found to be making the forecast worse \u2013 and these activities need to be fixed or eliminated.<\/p>\n<p>Intel extensively uses FVA analysis.\u00a0 Over the last three years, Intel has taken the basic idea of FVA and applied it to a broader range of forecasting and supply chain process issues.\u00a0 Intel has gone through paradigm shifts in thinking, and how to address the change management issues.<\/p>\n<p>On Monday February 22, at the <a href=\"http:\/\/www.ibf.org\/1002.cfm\">IBF&#8217;s Supply Chain Forecasting Conference in Phoenix<\/a>, perhaps we (Emily Rodriguez, Program Manager at Intel) and Michael Gilliland at SAS) can help improve your forecasting performance. We are delivering a morning workshop entitled \u201cA Primer for Management: Fundamentals of Business Forecasting and Conducting Forecast Value Added (FVA) Analysis.\u201d\u00a0 The theme for our presentation is \u201cwhat management must know about forecasting.\u201d\u00a0 We will be providing step-by-step instructions for gathering, analyzing, and reporting the data needed for a thorough FVA analysis, along with several brief case studies at organizations, where it has been applied.\u00a0 Furthermore, Emily will provide an in-depth case study of the use of FVA analysis at Intel.<\/p>\n<p>Whether FVA is a new concept to you, or you are an experienced practitioner of the approach, we look forward to having you join us in Phoenix.\u00a0 Meantime, stay abreast of the latest innovations and defamations in forecasting, in <a href=\"http:\/\/blogs.sas.com\/forecasting\">The Business Forecasting Deal<\/a>.\u00a0 See you in February at the <a href=\"http:\/\/www.ibf.org\/1002.cfm\">IBF Supply Chain Forecasting Conference<\/a>.<\/p>\n<p>Emily Rodriguez, Program Manager<br \/>\nIntel Corporation<\/p>\n<p>Michael Gilliland, Product Marketing Manager<br \/>\nSAS Institute<\/p>\n<p style=\"text-align: center;\"><a href=\"http:\/\/www.ibf.org\/1002.cfm\"><strong>See EMILY RODRIGUEZ &amp; MICHAEL GILLILAND Speak in Phoenix at IBF&#8217;S:<\/strong><\/a><\/p>\n<p style=\"text-align: center;\"><a href=\"http:\/\/www.ibf.org\/1002.cfm\"><img loading=\"lazy\" decoding=\"async\" class=\"size-full wp-image-558 aligncenter\" title=\"http:\/\/www.ibf.org\" src=\"https:\/\/demand-planning.com\/wp-content\/uploads\/2009\/12\/1002.gif\" alt=\"\" width=\"641\" height=\"163\" \/><\/a><\/p>\n<p style=\"text-align: center;\"><a href=\"http:\/\/www.ibf.org\/1002.cfm\"><strong>$695 USD for Conference Only!<\/strong><\/a><\/p>\n<p style=\"text-align: center;\"><a href=\"http:\/\/www.ibf.org\/1002.cfm\"><strong>February 22-23, 2010<br \/>\nPhoenix, Arizona USA<\/strong><\/a><\/p>\n<p style=\"text-align: center;\"><input id=\"gwProxy\" type=\"hidden\" \/> <input id=\"jsProxy\" onclick=\"jsCall();\" type=\"hidden\" \/> <input id=\"gwProxy\" type=\"hidden\" \/> <input id=\"jsProxy\" onclick=\"jsCall();\" type=\"hidden\" \/> <input id=\"gwProxy\" type=\"hidden\" \/> <input id=\"jsProxy\" onclick=\"jsCall();\" type=\"hidden\" \/> <input id=\"gwProxy\" type=\"hidden\" \/> <input id=\"jsProxy\" onclick=\"jsCall();\" type=\"hidden\" \/> <input id=\"gwProxy\" type=\"hidden\" \/> <input id=\"jsProxy\" onclick=\"jsCall();\" type=\"hidden\" \/><\/p>\n<p><input id=\"gwProxy\" type=\"hidden\" \/> <input id=\"jsProxy\" onclick=\"jsCall();\" type=\"hidden\" \/> <input id=\"gwProxy\" type=\"hidden\" \/> <input id=\"jsProxy\" onclick=\"jsCall();\" type=\"hidden\" \/> <input id=\"gwProxy\" type=\"hidden\" \/> <input id=\"jsProxy\" onclick=\"jsCall();\" type=\"hidden\" \/> <input id=\"gwProxy\" type=\"hidden\" \/> <input id=\"jsProxy\" onclick=\"jsCall();\" type=\"hidden\" \/><\/p>\n<p><input id=\"gwProxy\" type=\"hidden\" \/><input id=\"jsProxy\" onclick=\"jsCall();\" type=\"hidden\" \/><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Are there some things you wish your organization\u2019s management knew about forecasting?\u00a0 Those of us who have served time in the forecasting profession know that \u201cserving time\u201d is an apt description of the job.\u00a0 Being a business forecaster is sort of like being in county lock-up \u2013 without the benefit of free meals, charming bunkmates, [&hellip;]<\/p>\n","protected":false},"author":6,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[33],"tags":[64,34,35,133,36,134,37,89,38],"class_list":{"0":"post-651","1":"post","2":"type-post","3":"status-publish","4":"format-standard","6":"category-forecasting-and-planning","7":"tag-demand-forecast","8":"tag-demand-planning","9":"tag-forecasting","10":"tag-fva","11":"tag-ibf","12":"tag-intel","13":"tag-sop","14":"tag-sas","15":"tag-supply-chain"},"_links":{"self":[{"href":"https:\/\/demand-planning.com\/wp-json\/wp\/v2\/posts\/651"}],"collection":[{"href":"https:\/\/demand-planning.com\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/demand-planning.com\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/demand-planning.com\/wp-json\/wp\/v2\/users\/6"}],"replies":[{"embeddable":true,"href":"https:\/\/demand-planning.com\/wp-json\/wp\/v2\/comments?post=651"}],"version-history":[{"count":0,"href":"https:\/\/demand-planning.com\/wp-json\/wp\/v2\/posts\/651\/revisions"}],"wp:attachment":[{"href":"https:\/\/demand-planning.com\/wp-json\/wp\/v2\/media?parent=651"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/demand-planning.com\/wp-json\/wp\/v2\/categories?post=651"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/demand-planning.com\/wp-json\/wp\/v2\/tags?post=651"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}