Sales Forecasting allows a company to better negotiate contracts for raw material, logistics and vendor supplied assemblies. An Accurate Sales Forecast provides for a smother running operation with less last minute rushes to fulfill customer requirements. Many company's that are successful in accurate Sales Forecasting share a common structure of these forecasting parameters:
1. An Independent group is responsible for the Sales Forecasting program.2. Demand forecasting, trend forecasting and future sales and marketing plans are included in the final Sales Forecast.
3. Good communication thru out the company of the Sales Forecasting process and results.
4. A collaborative effort is required from all departments that are effective by the Sales Forecast.
5. Measure, Measure, Measure
An independent group should be set up to deal with the Sales Forecasting process and is essential for a truly collaborative effort. This group must be independent of all other departments and held accountable for the Sales Forecasting process and final accuracy. The focus of this group is to inform, collect and analyze, follow up and prepare an accurate Sales Forecasting. Because they are independent of all departments this group is able to work with all groups without those groups worrying about conflicting agendas or goals.
The Sales Forecasting groups goal is to produce two documents, the Sales Forecast and the Sales Forecast Plan. The Sales Forecast is what future sales would be without any restrictions such as material availability, production restraints etc. The Sales Forecast Plan uses the Sales Forecast and factors in all of the restraints that prohibit meeting the demand. These two documents advise management of the sales potential and how best to implement a plan to meet it.
The start of each Sales Forecasting period is the end of the previous Sales Forecasting results. The Sales Forecasting group must carefully measuring the results, and any reasons why the forecast plan was not met. By using this information in the next period will greatly increase the accuracy of all future Sales Forecasting efforts.
