The Politics Of Forecasting

The PoliTics of forecasTing By richard herrin There is a bias in a forecast if the error is consistently positive or negative … the intentional bias often comes from the budget …the best way to handle a bias of any function is to determine whether or not its override improved or worsened the baseline forecast. F F or those responsible for balancing supply and demand, accurate and unbiased forecasts are their holy grail. Using accurate demand forecasts and an ERP (Enterprise Resource Planning) system, we can run MPS (Master Production Scheduling) and MRP (Material Requirement Planning) to create production and purchasing plans that meet demand using minimum working capital. Coordinating these plans through an S&OP process, we can align the operations across the business to deliver continuous revenue growth and cost reduction. The company’s success would then depend on the ability to maintain accurate data (bill of material, routing, inventory files, etc.) and efficiently execute the plans developed through the S&OP process. But the only thing preventing supply and demand managers from being among the most value adding resources in a company is the ability to obtain accurate ...