Forecasting "Best Practices"
"Effective demand planning and sales forecasting across the supply chain can bring a host of benefits. Specifically, it can help improve labor productivity, reduce head count, cut inventories, and speed up production flows, and increase revenues and profits.
-Edward J. Marien
To find the "best practices" for forecasting, our team researched many cases of forecasting success, and found five companies with a common theme. Rayovac, the Coca-Cola Bottling Company, AAi. FosterGrant, the Sara Lee Corporation, and the Scotts Company all had major problems with forecasting, some of them very similar. To address and solve these problems each of these companies made major improvements to their forecasting systems. Although some used similar methods and others very different, these companies found that the right people, process and information technology was the key to efficient and accurate forecasting.
Rayovac
Rayovac discovered the proper use of forecasting when it implemented its consensus decision-making teams to improve their performance. They believe that the best information comes directly from the customer. Therefore, their forecasting takes place from the bottom-up. Sales, marketing, finance, and supply chain builds a consensus for forecasting, inventory management, scheduling, warehousing, and transportation. Their consensus forecasting is the responsibility of a cross-functional team.
For their annual planning process, a bottom-up and a top-down forecasting procedure is used. The top Key Res ...