ForeCASt ACCurACy ImProvement wIth A ProCeSS redeSIgn: A CASe Study By Joseph R. Muscatello Disruptive events cannot be fully captured with forecasting packages, but you can do it with a proper process … judgmental models are used where we don’t have the historical data, as in the case of new products or when we are forecasting far into the future. A A major chemical company implemented a new ERP system with an elaborate sales forecasting package, but it failed to improve its sales forecasts in some of their product lines. In the past, the company did not use any of the formal forecasting techniques. Mostly, forecasts were prepared by using rules of thumb or naïve forecasting techniques. By and large, the sales force was made up of engineers who were more product support people than traditional salespeople. The lack of understanding of the forecasting process was evident, specifically in the judgmental arena; as such, they failed to include the effect of various factors that could not be quantified. A formal continuous improvement team was formed to address this issue. Current ForeCAStIng sYsteM Although the company improved its forecast accuracy by implementing ...

From Issue: Summer 2009
(Summer 2009)

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Forecast Accuracy Improvement With A Process Redesign: A Case Study