Whitepaper: The Forecasting Value Change
What is the Forecasting Value Chain?
In many companies, forecasts are the primary driver that guides business activity.
The forecasting value chain is both a concept and a goal. It is defined by the information flows and interactions between forecasting groups and other functional groups within organizations. There are many types of business forecasting – such as demand planning, unit sales forecasting, inventory planning, capacity planning, and financial forecasting, to name just a few. In many companies, forecasts are the primary driver that guides business activity. It is vitally important that forecast models are based on reliable data, encompass the full spectrum of likely scenarios, and are integrated to show the full “cause and effect” of scenario changes to the business. The forecasting value chain mandates that the flow of forecasts to the appropriate constituencies for decision making should be unfettered and bi-directional. Bi-directional flow means there should be a feedback loop for pervasive understanding of the current and future business environment. Without accurate, comprehensive, and integrated forecasts, companies risk failing to meet customer demands, internal business goals, profitability and continued success.
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