Business spends many millions on forecasting software and what are they getting for it?

Don’t forecasts tend to confuse what is already on hand in terms of information?

Take inventory – the inventory on hand represents the maximum you expect to sell until the next replenishment comes in. So, its a forecast of the reasonable maximum sales until the next delivery. Correct? So why not use it as the forecast rather than confusing the issue with a forecast based on history.

Good forecasts are some number PLUS a range around that number. The downside number is irrelevant and the upside number is the equivalent of your inventory. (Your target inventory is the amount you expect to sell between replenishments – the maximum amount. Inventory takes into account that a forecast is uncertain – something many managers do not. Managers are in love with deterministic numbers; but the World is chaotic!).

Think about it – the idea should work whether you are in distribution or purchasing. What I have not talked about is communication, and the strategy to set something up based on the idea.

If you are interested you can sign up for the following webinar … it is about consumer goods distribution, but most of what is in that webinar applies to any “MFA” environment. MFA = Make For Availability and implies a commitment to clients that when they need an article it will always be available.

You can register here: https://www2.gotomeeting.com/register/431386690

I will be presenting! Hope nobody minds the bit of self advertising!!