Forecast errors significantly impact costs, particularly those related to inventory. Overstocking can tie up capital, increase storage expenses, and raise the risk of inventory obsolescence. Conversely, understocking can lead to lost sales, reduced customer satisfaction, and potential damage to the company's reputation. Benchmarking allows us to assess our current performance relative to industry standards. If we are performing at or above the industry average, we may consider setting higher goals. If our performance is below average, it is crucial to identify the reasons so that corrective action can be taken. The objective of this report is to benchmark forecast errors to further improve them.

By Chaman L. Jain

TABLE OF CONTENTS

• WHY BENCHMARKING?
• DATA USED
• CHARACTERISTICS OF FORECAST ERRORS
• FORECAST ERRORS | ALL INDUSTRIES COMBINED | 2023-2024
• FORECAST ERRORS | INDUSTRY LEVEL | 2023-2024
• HOW MUCH PROGRESS HAVE WE MADE?
• CONCLUSIONS
  • EXHIBIT 1 | SKU LEVEL FORECAST ERRORS
    All Industries Combined | 2023-2024
  • EXHIBIT 2 | CATEGORY LEVEL FORECAST ERRORS
    All Industries Combined | 2023-2024
  • EXHIBIT 3 | SKU LEVEL FORECAST ERRORS
    Consumer Products | 2023-2024
  • EXHIBIT 4 | CATEGORY LEVEL FORECAST ERRORS
    Consumer Products | 2023-2024
  • EXHIBIT 5 | SKU LEVEL FORECAST ERRORS
    Food & Beverages | 2023-2024
  • EXHIBIT 6 | CATEGORY LEVEL FORECAST ERRORS
    Food & Beverages | 2023-2024
  • EXHIBIT 7 | SKU LEVEL FORECAST ERRORS
    Industrial Products | 2023-2024
  • EXHIBIT 8 | CATEGORY LEVEL FORECAST ERRORS
    Industrial Products | 2023-2024
  • EXHIBIT 9 | SKU LEVEL FORECAST ERRORS
    Pharmaceuticals | 2023-2024
  • EXHIBIT 10 | CATEGORY LEVEL FORECAST ERRORS
    Pharmaceuticals | 2023-2024
  • EXHIBIT 11 | SKU LEVEL FORECAST ERRORS
    Retail | 2023-2024
  • EXHIBIT 12 | CATEGORY LEVEL FORECAST ERRORS
    Retail | 2023-2024
  • EXHIBIT 13 | WEIGHTED AVERAGE FORECAST ERRORS BY INDUSTRY
  • EXHIBIT 14 | FORECASTS ERRORS
    2017-2019 VS. 2020-2022 VS. 2023-2024