Forecast Errors
Volume I, Issue 5, December 15, 2014
A forecast error is the difference between the actual and predicted value. The consequences are expensive inefficiencies that can be resolved with lean manufacturing technology.
Forecast Errors Eliminated with Sourcing Roadmap
Being armed with clean and accurate data regarding suppliers, costs, risks and other important criteria, is absolutely crucial as a first step in understanding where to focus sourcing efforts. Developing a sourcing roadmap that generates the greatest results requires additional analysis of organizational goals, market conditions, and spending patterns. Correcting forecasting errors requires implementation of best practices for collecting and classifying spend and supplier data for effective spend analysis, how to use this analysis to build a long term sourcing strategy and sourcing roadmap, and how to identify an organization's data that can be most helpful in making sourcing decisions. View video here.
Forecast Errors Reduced with Data-Driven Innovation Reports U.S. Chamber Foundation Report
The U.S. Chamber of Commerce Foundation today released a report which, through the insights of several notable industry experts, offers a look at current data-related issues and innovations and the ways in which they will shape the future of data-driven innovation and the economy. The report, The Future of Data-Driven Innovation, includes contributions from some of the top minds in business, technology, and economics and presents actions that can be taken today to maximize the value of tomorrow’s digital data. U.S. Chamber of Commerce Foundation President John R. McKernan Jr. noted “It is also spurring intense dialogue...the impact is large and growing across a range of industries, all while creating jobs and opportunity for a host of communities.” A copy of the full report is available here.
Forecast Errors Reason Cost Reduction Promises Fail
The promise of reducing costs for the goods and services purchased and increasing employee productivity has elevated the sourcing and procurement technology market to more than $1.4 Billion in annual sales. Yet two decades after the introduction of these technologies, many companies are still not getting the results anticipated. Forecasting errors are the trigger of these broken promises. Read more here.
Forecast Errors Impact Buyers and Planners
Forecast errors impact buyers and planners most because of the current inability to directly link Supply Chain Planning with Execution Management to optimize orders, inventory, and transportation on a daily basis. This was an elusive goal, yet as the benefits of Closed-Loop Operational Management is understood, the capability tightly-couples planning systems to execution systems and turns optimized plans directly into action. Buyers and planners have a way to work with operations cooperatively. Read more here.
Move from forecast errors to demand driven accuracy:
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