FVA interview with Shaun Snapp

Shaun Snapp
Shaun Snapp

The Institute of Business Forecasting's FVA blog series continued in January, with my interview of Shaun Snapp, founder and editor of SCM Focus.

Some of Shaun's answers surprised me, for example, that he doesn't compare performance to a naïve model (which I see as the  most fundamental FVA comparison). But he went on to explain that his consulting mainly involves software implementation and tuning (often with SAP). His work stops once they system is up and generating a forecast, so he is generally not involved directly with the planners or the forecasting process.

Shaun notes that most of the companies he works with don't rely on the statistical forecast generated by their software -- that planners have free reign to adjust the forecasts. And yet, because it takes effort to track the value of their forecast adjustments, it doesn't get done (planners are too busy making all their adjustments to step back and measure their own impact!).

He also notes that most of his work is focused on technical system issues -- he's found little demand for forecast input testing or other FVA-related services he can provide.

Discouragingly, he states he's never found a forecasting group that based its design on FVA. While clients may be receptive to the basic idea -- of applying a scientific approach to evaluating forecasting performance -- there are actually some groups where FVA is contrary to their interests. He gives the example of a sales group whose main interest is for the company to maintain an in-stock position on all their items. They have a lot of power within the company, and can achieve their objective by biasing the forecast high, thus forcing the supply chain to maintain excess inventory.

Read the full Shaun Snapp interview, and others in the FVA series, at www.demand-planning.com.

Coming in February: Interview with Steve Morlidge of CatchBull

Steve has been subject of several previous BFD blog posts, exploring his groundbreaking work on the "avoidability" of forecast error (Part 1 of 4), forecast quality in the supply chain (Part 1 of 2), and a Q&A on his research (Part 1 of 4). He also delivered a Foresight/SAS Webinar "Avoidability of Forecast Error" that is available for on-demand review. Check the IBF blog site later this month for Steve's FVA interview.





About Author

Mike Gilliland

Product Marketing Manager

Michael Gilliland is a longtime business forecasting practitioner and formerly a Product Marketing Manager for SAS Forecasting. He is on the Board of Directors of the International Institute of Forecasters, and is Associate Editor of their practitioner journal Foresight: The International Journal of Applied Forecasting. Mike is author of The Business Forecasting Deal (Wiley, 2010) and former editor of the free e-book Forecasting with SAS: Special Collection (SAS Press, 2020). He is principal editor of Business Forecasting: Practical Problems and Solutions (Wiley, 2015) and Business Forecasting: The Emerging Role of Artificial Intelligence and Machine Learning (Wiley, 2021). In 2017 Mike received the Institute of Business Forecasting's Lifetime Achievement Award. In 2021 his paper "FVA: A Reality Check on Forecasting Practices" was inducted into the Foresight Hall of Fame. Mike initiated The Business Forecasting Deal blog in 2009 to help expose the seamy underbelly of forecasting practice, and to provide practical solutions to its most vexing problems.

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