Forecasting is the Not the Answer

I have become cynical anymore when I hear people talk about forecasting.  It has gotten to the point of being laughable.  Have you ever sat in a meeting and listen to someone say that if the forecast was accurate we would have done well?

Really?  I am stunned that people will still utter those words.

I have seen people act like getting a forecast right shouldn’t be that hard and forecasting is the simple solution to all of our problems.

There are three things in life that are certain: Death, Taxes, and 100% of Forecasts are inaccurate.

Don’t get me wrong.  Forecasts can still be useful.  Forecasts can show changing trends.  Is there going to be a peak output time frame?  A low output time frame?  What is the magnitude of it the peak or valley?

Most companies seem to have people dedicated to determining the accuracy of the forecast.  This can help because it can give a clue as to how much the forecast might be off.  Now the company has a range but it is still a forecast.

The flip side to forecasting is pulling or replacing what the customer has bought.  In this case, your output matches your demand.  Now the focus can shift from a non-value added activity such as making an accurate forecast and focus on value added activities like adding value to the product or service in order to increase sales.

Lets stop talking about forecasting and start focusing on only producing what is sold.

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Posted on August 10, 2011, in Customer Focus, Waste and tagged , , , . Bookmark the permalink. Leave a comment.

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