Gartner Research

Use Forecast Error Metrics Framework to Measure, Diagnose and Report Forecasting Process Capability

Published: 01 December 2016

ID: G00314237

Analyst(s): Marko Pukkila

Summary

Most companies measure forecast error and report the results in S&OP. Few use different metrics for error root cause diagnostics and reporting the results. Supply chain leaders can use the metrics defined here to reveal and fix the causes of poor forecasting performance.

Table Of Contents
  • Key Challenges

Introduction

Analysis

  • Measure Forecast Deviation at a Granular Level
  • Use Appropriate Aggregate Forecast Measures to Find the Primary Forecast Error Contributors as the Diagnostic for Root Cause Analysis
  • Report the Overall Demand Forecast Accuracy by Using a Weighted Forecast Metric on the Most Important Products to the Business

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