Account level forecasting needs down stream Data

ACCOUNT LEVEL FORECASTING NEEDS DOWNSTREAM DATA By Larry Lapide (This is an ongoing column in The Journal, which is intended to give a brief view on a potential topic of interest to practitioners of business forecasting. Suggestions on topics that you would like to see covered should be sent via email to llapide@mit.edu). I’m often asked by people I meet how they can start to leverage the Point-of- Sale (POS) data they get from their retail customers to improve their demand forecasting and planning. The first question I ask them is whether they currently do customer- or account-level forecasting and planning. They are usually surprised by my question. However it’s simple to understand why I ask. Currently POS data is provided to a manufacturer by only a small subset of its customer base. In the retail world, Wal-Mart and Target provide this type of data, and maybe a few of the other bigger retailers; but mid-sized and mom-and-pop retailers don’t. This means that POS data is collected for (and hence only relevant) for use in improving the forecasting and planning of only a fraction of one’s total demand. The answer I get back from most people to my question is that ...