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Typical FMCG Demand Patterns
Noisy Forecasts
Biased Forecasts
Simple Forecasts

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Conformance To Plan
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Many clients think they are bad at forecasting. Sequoia can show you not only that you may be better than you think - but also how to get really good.

Forecast Performance Improvement
Forecasts are never going to be accurate – but they mustn’t add noise and they mustn’t be biased.

Forecasting within the FMCG industry is a universal problem, often driven by:
  • A lack of understanding as to the role of forecasting, and
  • An unrealistic expectation of what can be forecast.
A forecast should therefore simply be an estimate of what the average customer demand might be.
There are some key principles to consider when forecasting:

FMCG demand patterns are too noisy to forecast accurately.
100% noise is typical – this can easily drown out signals within demand patterns. ...more

But the forecast should NOT add more noise.
Forecasters often chase the noise rather than focus on the signals. ...more

And it should not be biased.
Over forecasting of demand is common within the FMCG industry. Unnecessary costs are incurred by the resultant excessive stock levels. ...more

Simple forecasts tend to work best.
A rolling average forecast will be correct on average thereby cutting through the noise. ...more
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