Why Your Forecast Is Wrong (And Always Will Be)

How is your demand forecast like a tabloid psychic? Their record for accuracy is just about the same. Rob Byrne, chief executive officer of Terra Technology, says big consumer-products companies typically have an average weekly forecast error of more than 50 percent. He joins us in this episode of the podcast to explain why. Byrne lays out all of the challenges that affect the retail forecast: corporate silos, individual bias, old technology and the massive number of SKUs that have to be tracked, to name a few. He also introduces the concept of demand sensing – a technique he says can help to improve the forecast, although no company will ever get it 100-percent right. Get used to it.