Essentials of Demand Forecasting and

Planning By Jonathon Karelse

A graduate of the MIT Sloan School of Management, Jonathon Karelse received his degree in value chain management. Since 2012, Jonathon Karelse has served as partner of NorthFind Partners, which offers analytics, functional expertise, and enterprise change management for a number of global organizations, with services including demand forecasting and planning.

Although demand planning is not an exact science, it is nonetheless vital for a business’ success. Before beginning the process, businesses should determine possible forecasting issues.

Introduction

For example, the potential impact of the information gained on the forecast depends on whether it reflects short-term or long-term financial projections and whether current demand is sporadic or consistent. Balanced against a business’ constraints and demand risks, the forecast is not a budget or marketing tool. Instead, it is designed to help businesses identify which products are the most profitable and why.

Finally, rather than focusing on the speed of the implementation process, businesses should ensure the forecast is implemented correctly and completely. Most importantly, demand forecast numbers should never be set in stone: as ironclad as they may seem, demand can fluctuate wildly depending on a variety of factors.

Forecasting and Planning