I believe that there are two ways your organization can improve the performance of statistical forecasting:
1) Wait for your business to become more forecastable
2) Develop a process to drive continuous improvement in your statistical forecasting approach
At PepsiCo Chicago, we have made great progress to improve the performance of our statistical forecasts by developing a continuous improvement process.
Before you begin this process, it is critical to have clear organizational accountability and a strong team in place that possesses strong analytical & technical capabilities coupled with the business knowledge to know what drives sales. Next, organizations should develop a consistent, repeatable process to evaluate their statistical forecasting performance and identify the key drivers of forecast error. By identifying the key drivers of error, you can then identify and prioritize where there are opportunities for continuous improvement and how best to pursue them further. Finally, you’ll need to test your changes to ensure that they have had a positive impact on organizational performance.
Organizations that use statistical forecasting expect their processes to provide a highly accurate forecast. Furthermore, organizations will typically expect the performance of the statistical forecasts to improve over time in turn raising supply chain performance and customer satisfaction. To learn more about how your organization can improve statistical forecasting by developing a process for continuous improvement, please attend my presentation at the upcoming IBF Supply Chain Forecasting & Planning Conference in Orlando conference in Orlando, Florida February 27 through March 1.
I look forward to seeing you there!
Jason Dols, Senior Manager, Demand Planning Capability Lead
Hear Jason Speak At IBF’s
The materials/opinions posted on this blog/site are my own and do not represent those of PepsiCo or any of its subsidiaries or divisions. Nor do they constitute any official communication of those companies.