Benchmarking the Forecasting Process

BENCHMARKING THE FORECASTING PROCESS By Chaman L. Jain, St. John’s University As I mentioned earlier the success of a forecasting function depends on people, process, technology and resources. Among them, the process is the most important component that connects people to technology and to resources. Therefore, it has to be well thought out and well structured. What other companies are doing can help you to set up the right process, and improve it if it is already in place. DEFINING FORECASTING PROCESS The process lays out in detail: What kind of forecasts and level of detail are needed? How far ahead forecasts will be prepared? How often they will be updated and revised? What data/information will be used to prepare them, and where that will come from and how. Where the forecasting function will reside? Who will participate in the process? What kind of infrastructure and technology will be needed? Which forecasting software/ system and models will be used? Which forecasting philosophy will be followed — one-number forecast or multiple number forecasts? Which forecasting approach will be followed — bottom up, top-down or somewhere in the middle? Do we need a monthly ...