Academic journal article The Journal of Business Forecasting Methods & Systems

The Forecaster as a Key Member of the Strategic Planning Team

Academic journal article The Journal of Business Forecasting Methods & Systems

The Forecaster as a Key Member of the Strategic Planning Team

Article excerpt

Management wants not accuracy but usefulness of forecasts as a decision tool ... causal models provide important insights into the business ... use company's terminology in presenting forecasts ... one number forecast is a must for having coordination among different functions.

As a forecaster, I may be just a bit biased, but I strongly believe that our unique skills, as professional forecasters or as managers with forecasting training and experience, enable us to be significant contributors to the strategic direction of our companies. I hope I can share a few lessons from my own experience that will help some of you step further into such a role. I was fortunate during my career to have had early exposure to forecasting as a strategic tool. Duracell, in the mid 1970s, was still a relatively small company, giving us all the opportunity to work on a wide variety of projects, well outside our functional specialization. As Duracell grew, I had the particular good fortune to be reporting to that rarest of Marketing Vice President, one whose early career was also in forecasting and sales analysis. He helped me make that transition from being a master technician at forecasting sales to using forecasting as a tool for managing the business. His two favorite questions still resonate in my ears: "Is the news good or bad?" and "What would you do about it?"


During the last 25 years, I have seen forecasting from a variety of functional environments, ranging from finance, to distribution and logistics, to the world of marketing and sales. Forecasting plays a key role in all these functions. But its emphasis shifts back and forth like a pendulum, one time on one function, another time on another function, and then back again. The latest emphasis of forecasting has been in the areas of scheduling and logistics, renamed "Supply Chain Management." This goes back to the operations management issues that I saw when I entered the workforce in the early 1970s. This is certainly an important area, and comes, as did prior waves, from tidal shifts in computer capabilities that have enabled us to use techniques, which were once considered highly sophisticated and complex, efficiently and economically in a business operating environment.

These are, of course, valuable tools for business, and, during their implementation phase, will make noticeable contributions to a new, more efficient inventory and operating environment. But the operating departments are like a wheel that no one pays attention to until it squeaks. When things are running smoothly, the end customers and the departments with a customer focus do not pay attention to the intense work that goes into keeping things on track. But, in the midst of the intense work that is needed to integrate forecasting systems as a part of the weekly or even daily operating environment, the forecaster should not lose sight of the fact that he or she can make a significant contribution in strategic discussions also.


And, perhaps we can all be just a little selfish and career oriented. The movers and shakers of a company are those with responsibilities for change, for the new ideas in managing and implementing adjustments in strategic directions. For different companies, this may come from various departments ranging from sales, to marketing, to R&D, to Finance. But they all have a need for quantitative and forecasting skills. They rarely have training in forecasting. They know little of the mathematical tools at our disposal for understanding the business. While they are experienced and smart businessmen, sophisticated techniques can give them a glassy eye look. But they desperately need the insights available from a good forecast manager, the guidance that can tell them which business issues to focus on for the greatest effect. They need it with a translation to the normal argot of sales and marketing terminology such as competitive advantage and product portfolio management. …

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