From World Class Master Scheduling: Best Practices and Lean Six Sigma Continuous Improvement

No topic generates more controversy than forecasting. Production people think it is the answer to all their troubles, and sales people think it is crazy to expect any accuracy from this process. The result in some organizations, unfortunately, is that production or materials professionals do the company forecasting without the demand-side people involved, and the sales people just plug in dollar amounts for the budgeting process. As the saying goes, This is no way to run a railroad or a manufacturing organization!

Forecasting, as defined in Chapter 4, is a demand-side process and needs to belong to the demand-side experts. Unfortunately, perfection in accuracy is a dream. Moderate accuracy can be achieved, but to think that it will be sustainable without a lot of work is optimistic at best. The problem comes from companies that are using new services and trying new products. High-performance companies, by nature, are the most difficult to predict because of special causes introduced into the processes every day. These come from new markets, new products, and new services offered to entice customer loyalty and business. In this chapter, we will poke at the idea of how good the forecast needs to be. This is not an exact science, and markets and manufacturing processes can differ in many respects. Because of this, there will be no magic answer, but ideas and thought may help the process design of forecasting in your company.


In high-performance companies, the sales and/or marketing team owns...

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Topics of Interest

The master scheduling tools are almost as important as the master production scheduling process not quite, but almost. The tools used for master scheduling are normally found within the enterprise...

OVERVIEW Forecasting is probably the single most talked about process within the enterprise resource planning (ERP) business model. Master schedulers are involved with the demand plan forecast so...

Chapter List Chapter 1: Forecasting Chapter 2: Collecting and Examining the Data Chapter 3: Smoothing Techniques Chapter 4: Regression Analysis Chapter 5: Time Series Analysis Chapter 6:...

Chapter List Chapter 2: What is Demand Management? Chapter 3: Is Demand Management Worth the Effort? Chapter 4: Principles of Demand Planning Chapter 5: Principles of Communicating Demand Chapter...

Overview Forecasting is the 'science' of predicting demand. The forecast is generally formulated either from historical trends where past performance is 'scientifically' extrapolated into a future...