Forecast Accuracy Management: Lessons Learned From Japanese Companies

While forecast error is an intrinsic part of demand planning, what separates advanced planning teams from the rest is how forecast error is measured, how the causes of error are identified, the remedial actions to improve forecasting processes, and the downstream supply chain decisions taken in light of forecast error. In this article, I examine the different types of forecast error metrics used in Japan, the common causes of error, and crucially, steps to reduce error with a focus on reviewing demand forecasting processes and customer and market analysis. I call this multi-faceted approach Ambidextrous Forecast Accuracy ...