Here is editor Len Tashman's preview of the new Spring 2014 issue of Foresight. In particular note the new article by Steve Morlidge of CatchBull, reporting on an analysis of eight B2B and B2C companies, which we'll discuss in a separate post.
An organization’s collaboration in forecasting and planning has both internal and external components. While sales and operations planning (S&OP) has become the standard infrastructure for collaborative efforts within the firm, opportunities for collaboration among supply chain partners have emerged as potential win-wins for the companies involved.
Our feature article examines the characteristics, benefits, and challenges of collaborative planning, forecasting, and replenishment (CPFR) among supply chain partners. Jeff Van-Deursen and John Mello’s Roadmap to Implementing CPFR recommends specific policies that permit two or more companies to “monitor, control, and facilitate the overall performance of a supply chain by achieving a smooth flow of product between firms.” CPFR partners, however, “must integrate their supply chains, sales organizations, and marketing intelligence into cross-organizational sales and operations planning (S&OP) and budgeting processes.”
In his Commentary on the Roadmap, Ram Ganeshan emphasizes that “CPFR is not a silver bullet for improving forecasts, but rather a set of structured processes that improve communication and coordination between supply chain partners on matching product supply and demand.” The key challenges, however, involve ensuring data integrity, standardizing forecasts, revising transactional relationships, and a willingness to deal with some significant organizational changes that could cause discord among functional units.
In our section on Forecasting Intelligence, Ram Ganeshan returns as an author to describe how retailers can benefit using Clickstream Analysis for Forecasting Online Behavior. A clickstream is an online trail, a prospective customer’s sequence of keystrokes or mouse clicks made as they consider making a purchase on the Internet. Through capture and analysis of the clickstream, a customer can provide value to a seller in helping to understand the customer’s intentions and thus improve their purchasing experience – as well as the retailer’s profitability.
Continuing Foresight’s exclusive coverage of forecastability issues (that is, the upper and lower limits of forecast accuracy), Steve Morlidge analyzes item-level forecasts at eight companies, granular data notably missing from the well-known M-competitions of forecast accuracy. Steve’s findings are an eye-opener, suggesting clearly that companies are not typically extracting maximum benefit from their forecasting systems, and showing how forecasters can upgrade Forecast Quality in the Supply Chain.
In 1981, the respected economist Julian Simon challenged the equally respected ecologist Paul Ehrlich to a wager over whether the planet’s future would entail mass starvation as population outpaced our productive resources (Ehrlich), or see the fruits of technological progress and human ingenuity sustain and improve our lives with ever-increasing abundance (Simon). Foresight Long-Range Forecasting Editor Ira Sohn expands upon Paul Sabin’s recent book The Bet to describe “the scholarly wager of the decade” and how it mirrored at the time a larger national debate between future-thinking optimists and pessimists.
We conclude this issue with a pair of book reviews on two volumes of a very different nature. Predictive Business Analytics by Lawrence Maisel and Gary Cokins seeks to show how companies can improve their usage of analytical tools. Reviewer McKay Curtis offers a blunt assessment of the book’s value to experienced analysts.
The Map and the Territory is former Federal Reserve Board chairman Alan Greenspan’s reflection on our most recent economic upheaval (which is normally dated to begin following the end of his term as chairman). Reviewer Geoff Allen tells us: “What you will learn from this book are some nice, personal Greenspan stories and a lot of data analysis to support a particular Greenspan viewpoint. Whether you will be persuaded to that viewpoint based on the evidence presented is another matter.”