Crimson and Co are pleased to announce Director, Crispin Mair’s comments on forecasting in Logistics Business IT and Bdaily.
Effective forecasting is essential for organisations trying to reconcile excellent customer service with high supply chain efficiency and provide a solid basis for long term planning. Yet recent research conducted by CatchBull indicates that 50 percent of an organisation’s forecasting is less accurate than a simple ‘naïve’ forecasting strategy.
‘What continues to surprise us’ says Crispin. ‘Is that most companies are unaware of the level of waste in their forecast processes because the metrics they are using to measure performance are too simplistic, time consuming and uninformative.’ Another recent piece of research identifies poor forecasting as the main reason why 1000 top US companies surveyed had a staggering $1.1trillion of excess working capital. ‘Corporate America is littered with companies that have invested heavily in demand software but have little to show for it’ according to CIO magazine.
But is forecasting software to blame? Not according to Crispin. ‘Most forecasting packages will do a good job if used appropriately. The corollary is that, used inappropriately, most packages will also fail to beat a simple replenishment strategy. There is no single, silver bullet – and this is where most companies’ expectations become frustrated,’ he says.
Crispin continues, ‘Regardless of whether you have invested in a state-of-the-art forecasting system or simply running a home grown Excel solution, an FPM system measures and re-calibrates performance each time a forecast or actual is updated – in doing so, this will ensure you are provided with the maximum return on your software investment.’
To help companies striving to drive down inventory and improve service Crimson & Co have been working with CatchBull, a leading provider of Forecasting Performance Management software, to bring their toolkit called ForecastQT, to companies that stand to benefit most from its approach.
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Logistics Business IT