6 Key Forecast Exceptions Each Month

Eager to improve your forecast accuracy? Start by reviewing these 6 key forecast exceptions each month?

Finding time to review/clean up the detail forecast is always a challenge with sales/marketing review and S&OP deadlines to hit.
Here are some exception filters I find useful for review:

  1. New items – with less than 5 months of history.
  2. Override items – with previous adjustments to the sales forecast (question those as the assumptions may have changed!)
  3. Big changes vs last month – Items where the lead time forecast varies by more than xx% from last month’s forecast for the same period.
  4. Big growth/decline – Large % forecast trend up/down vs history
  5. High error – Large % forecast error previous month
  6. Questionable statistical forecast – Large % forecast simulation error

With a good forecasting system you can batch automate a ‘nested’ filtering process (varying %’s by ABC codes), tagging exceptions for efficient review and never looking at the same item twice.

Brendan Dowd is a big fan of “big picture” sales & operations planning but also interested in exploring the “nitty-gritty” details of forecasting and planning. He loves helping companies “get off the spreadsheets” by installing proven systems by Avercast.