Many companies, even after they have established a formal Sales and Operations Planning process (S&OP), neglect to implement a critical piece the puzzle for demand management success – Forecast Accuracy Measurement and Reporting. There is a reason for this. It is difficult, time-consuming and complex. So why bother calculating and reporting accuracy? Since the general assumption is that forecasts are always wrong, what can be gained by measuring demand plan or forecast accuracy?
Even though calculating forecast accuracy is difficult, leaving this piece out of the equation, limits the prospects for success for the entire process. Developing a method to calculate and track improvement should be as important as the forecasting process itself. Demand management is much more than forecasting. Measurement and accuracy reports help determine the effectiveness of the entire demand management process, which also includes communication, influencing, planning, prioritizing, as well as historical data management and statistical analysis.
Learn how you can help keep your demand management process honest.