John Gallucci - Nice-Pak, Inc.
“So, even a well thought-out forecasting process can be wasteful if it is not done properly.” This was a remark made by one of the attendees who came to hear my “Lean Forecasting & Planning” presentation at IBF’s recent Business Forecasting & Planning Academy @ 2 Levels. This declaration was also one of the more noteworthy “a-ha!” moments of the workshop. I designed the session so that it focused on the application of lean principles in the forecasting process. We defined any activity that did not create value for the consumer as wasteful, and then targeted those activities for elimination. Attendees also received some tools to assess where waste exists in their companies, and were able to provide an unending list of examples in their current processes such as…
… the duplicate activities that take place because of a lack of trust and poor communication across functions built on a silo mentality
… the painful manual processes that could be automated if capital funds ever become available
… the forecaster who spends most of her time on “C” and “D” items
… the egomaniac running Sales who pushes the Consensus Team to change their projection so he can meet his own objectives
….Etc. etc.
This IBF workshop also reviewed the opportunity cost of waste in Forecasting. Opportunity cost reduces an organization’s clock speed, reduces margins, and drives a less productive culture. It also focuses key resources on meaningless internal positioning tactics, while the competition is working towards creating the next big idea! One attendee at the workshop provided an example where her cross-functional team spent over 100 hours per month building a forecast that was never applied to their advanced planning system. What a waste!
The application of lean principles is relatively new to Forecasting, even though it is something we have been doing for years without recognizing it. The elimination of bias, for example, is driven by a zero-waste lean mentality. Pull-based market-driven S&OP is also emerging as a trend for leading Planning organizations. These activities show clear progress, but they only address part of the opportunity.
We must take a more holistic view when targeting the elimination of waste in the Forecasting process. It exists in our processes, policies, and systems. It is an unwieldy enemy that transcends functions and requires change management practices. Eliminating waste from Forecasting requires continuous improvement techniques that by definition never reach an end-state. The task is difficult, but then again, the most fulfilling ones often are.
A brief role-playing scenario in the IBF workshop provided clear proof that lean forecasting is a competitive advantage. My journey has begun. Has yours? Where does waste exist in your forecasting organization? Are you up for the challenge?
John Gallucci
Sr. Director of Supply Chain
Nice-Pak, Inc.
Hear John Speak at
