Answers to Your Forecasting Questions

Answers to Your Forecasting Questions Chaman L. Jain, Editor St. John’s University | Jainc@Stjohns.edu [ Q ] Over the last two years, we have been trying hard to improve our forecasts. We are very successful in that, but shortages and surpluses in our SKUs still persist in a significant way. How would you explain it? [ A ] It can happen because when Operations prepares a production plan, for one reason or other, it makes changes in the S&OP agreed-on numbers or it can occur because S&OP pays the most attention to forecasts at a category level, not at a SKU level, which is often the case. The S&OP process assumes if category level forecasts improve, so would SKU-level forecasts. It is a fairly good assumption, but surveys conducted by the Institute of Forecasting and Planning reveal that it is not true. The survey data show that in the last two years or so, category level forecasts have improved, but not at a SKU level. [ Q ] I am a Demand Planner working in Thailand for a brewery company, which has a number of operating companies throughout the Asia Pacific region. We have a difficult time getting accurate and useful input from our commercial managers. It appears that they have ...