The Kabuki dance many companies do around forecasting accuracy often amuses me.

Somehow, there is a notion that a few percentage points of accuracy in a forecast that already has good accuracy can make a significant impact.

This is marketed very heavily; hence, organizations and executives are obsessed with forecasting accuracy numbers.

And in some industries, if you already had a certain level of good accuracy for a SKU, then you invested in “advanced technology” to improve it, and you ended up attaining an improvement in supply chain performance, I can guarantee to analyze and prove that it was not the forecast accuracy improvement that drove the supply chain improvement.

From managing the supply chain more efficiently to showcasing the impact of accuracy to changes in processes around leveraging forecasting numbers, the drivers can be many, but not the increased accuracy.

The fact is, after attaining a reasonable level of accuracy, the benefits are attained by building a holistic forecasting process environment. Accuracy plays only a partial role in that environment.

So what do you really need to improve? Forecasting accuracy or the people, processes, and technology aspects around it?

Think About It !!!