Forecasting and Calibrating Demand with Economic Cycles

Jason Gustafson - Ingersoll Rand

Jason Gustafson - Ingersoll Rand

I started my demand planning career in the summer of 2008. Looking back, I know now that this turned out to be the worst possible time to break into the field.  At Ingersoll Rand, we were just starting to feel the initial pains of ‘The Great Recession’, but our system forecasts did not provide the data we needed to prepare.   Our business had been showing consistent growth for some time and thus, the system forecasts followed the same pattern.  As a result, what followed in 2009 was a mad scramble.  Our team was constantly making revisions to the demand plan until we felt that we had hit bottom.  When volumes started rising in late 2009, we had a similar problem.  However, as a result of this new problem our system forecasts were not keeping up with the actual demand in the marketplace.  I knew there had to be a better way to calibrate our future demand with economic cycles.

A solution came in the form of an economic model which we developed for different segments of our business.  During our presentation at the Supply Chain Forecasting & Planning Conference in Orlando Barbara Bennett, a Senior Analyst at ITR, will be giving an overview of the information needed to develop the very same economic model.  This will include providing those in attendance with an understanding of economic phases, leading and lagging indicators, and how these things apply to the rate of change for your business.    I will be discussing how my company, Ingersoll Rand, used the information we attained as a result of this model and incorporated it into the demand planning process.  This will include detailed explanations of how to calculate your rate of change and how to compare it to the economic model.  I will also discuss what to do when your data doesn’t match the prediction of the economic model.  I look forward to seeing you and discussing our journey to better demand planning in Orlando!

Jason Gustafson
Marketing Demand Planning Manager
Ingersoll Rand Industrial Technologies – Americas

Hear Jason Speak at

IBF's Supply Chain Forecasting & Planning Conference

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