Forecasting demand In The Aerospace and Defense Industry

FORECASTING DEMAND IN THE AEROSPACE AND DEFENSE INDUSTRY By Alex Safavi Describes forecasting practices in the Aerospace and Defense industry, as well as various problems which this industry encounters in its forecasting efforts … because of low demand, it is advisable to forecast in quarterly or annual buckets … the quality of data available in this industry is not as good as in other industries … proper application of forecasting models and S&OP process is also important. Forecasting in the Aerospace and Defense (A & D) industry is as important, if not more, as in the consumer products industry. High levels of inventory – that often exceeds multiple years of sales – highlight the opportunity that accurate forecasts offer in this industry to improve operating margins and service. In this article, we will discuss the challenge the Aerospace and Defense industry faces in forecasting demand and ways to address it. PRODUCTS AND SERVICES A & D products range from Aircraft, Helicopters, Ships and Tanks to Satellites, Space Shuttle, Missiles, Surveillance Systems and Radar Systems. (See Figure 1) They typically cost several million dollars each, require long lead times and are ...