Forecasting in a More Uncertain World

Author:

Charles R. Troyer, CSC Director, Consumer and Retail Practice

Two-thirds of the respondents in CSC’s 8th Annual Global Survey of Supply Chain Progress (PDF, 198K)responded that current economic conditions have impacted their operational planning processes. The number one stated required change is the “need for agile reaction to changes in customer demands.”

In fact, several other recent studies conducted by IDC, Gartner, SC Digest and others across the consumer products sector have also shown an increased focus on, and interest in, improving the forecasting and planning functions. CSC sees this phenomenon validated within our client base as well.

Why is forecasting so difficult?

So if forecasting is such a critical function, why aren’t companies better at it?

In our experience, there are two primary reasons. The first is a lack of clear ownership of the forecasting function within the CP organization. The second is an over-reliance on collaborative methods. In many ways, the momentum started with CPFAR (Collaborative Planning Forecast and Replenishment) has swung too far. This, in turn, has resulted in an underutilization of available data coupled to statistical methods. The answer is to find the proper balance of statistical/algorithmic forecasts with human intelligence.

Learn more about forecasting. Download our white paper "Forecasting in a More Uncertain World" (PDF, 369 KB).