Gartner Research

How to Improve Forecast Accuracy With Segmented Demand Planning Practices

Published: 03 July 2013

ID: G00252473

Analyst(s): Matthew Davis, Amber Salley, Noha Tohamy

Summary

To improve forecast accuracy, companies are constantly seeking demand planning practices that best utilize planners' expertise and analytics. This research outlines a product segmentation framework, based on forecast characteristics and corresponding differentiated demand planning approaches.

Table Of Contents

Analysis

  • FVA
  • Forecastability
  • A Framework to Manage Forecastability With FVA Measures
  • Quadrants and Recommendations
    • Products With High Forecast Error and Positive Planners' FVA (Quadrant 1) Are Best Fit for Planners' Expert Forecasting
    • Products With High Statistical Forecast Error and No or Negative Planners' FVA (Quadrant 2) Require a Focus on Supply Responsiveness and Demand Shaping Strategies
    • Products With Low Forecast Error and No or Negative FVA (Quadrant 3) Are Best Suited for Low-Touch Statistical Forecasting
    • Products With Low Forecast Error and Positive Planners' FVA (Quadrant 4) Should Be Examined to Determine the Marginal Returns of the Planners' Contribution

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