The Forecasting Value Chain

Interested in improving forecasting performance in your company?  Here's how:

>> View the recorded Webinar (buffer may take a few minutes to load - 1hr)
>> View the Forecast Pro & Quantrix Integration Tour (10 mins)
>> Read the Whitepaper

What is the Forecasting Value Chain?
The Forecasting Value Chain is both a concept and a goal.  It is defined by the information flows and interactions between forecasting groups and other functional groups within organizations.  There are many types of business forecasting – demand planning, unit sales forecasting, inventory planning, capacity planning, and financial forecasting, to name just a few.  In many companies, forecasts are the primary driver that guides business activity.  As such, it is vitally important that forecast models are based on reliable data, encompass the full spectrum of likely scenarios, and are integrated to show the full “cause and effect” of scenario changes to the business. 

The Forecasting Challenge
In all too many organizations, there is discontinuity in the distribution and feedback loop of forecasts.  Interruptions exist in the flow of information between the groups that develop forecasts and the groups that consume and plan around forecasts.  When forecast information flows are discontinuous, the company’s business planning activities cannot be truly aligned.  This results in eventual crisis where profitability is impacted, customer demands are not met, or other negative outcomes are experienced. 

The Forecasting Solution
An affordable and readily implemented solution that addresses the Forecasting Value Chain is within reach of most organizations.  Two proven forecasting technology leaders – Quantrix and Business Forecast Systems (Forecast Pro®) - offer easy-to-integrate solutions that enable companies to implement and achieve the Forecasting Value Chain.  The solutions deliver highly accurate, multi-dimensional forecasts, data sharing, and business modeling and analytics capabilities.

Result
The Forecasting Value Chain conceptualizes the way forecasting and business planning should be performed within successful, dynamic organizations.  Companies that implement technologies and processes that build a forecasting value chain will enjoy greater customer satisfaction, profitability, and flexibility for adapting to an ever-changing business environment.  Quantrix and Forecast Pro represent a powerful, affordable solution for achieving those goals.  

With Forecast Pro, you can:

• Create accurate forecasts automatically using several proven statistical methods
• Add your judgment and collaborate with others
• Formalize your forecasting process
• Integrate with other systems

With Quantrix, you can: 

• Gain true multi-dimensional forecasting perspective
• Implement quickly by business user
• Create formulas in plain language which are easy to understandable & audit
• Reduce number of formulas for greater confidence in accuracy and control
• Pivot data for quick answers to the ‘What if’ questions
• Integrate with other systems using DataLink™ Wizard
  

If you are ready to implement the Forecasting Value Chain in your company, click here.

Questions & Answers from the Forecasting Value Chain Webinar:

Forecast Pro Questions:

Can we reduce confidence limits?
Yes, in the webinar I was using the Forecast Pro default settings, 97.5% for the upper confidence limit and 2.5% (collectively a 95% confidence interval). Under program settings, you set both the upper and lower limits. For instance, if you set the upper limit to 95% and the lower to 5% you’d have a 90% confidence interval. It is important to note that, unlike many statistical forecasting software packages, Forecast Pro does constrain the settings on confidence limits to a narrow range of pre-sets (e.g., upper limit at 99%, 95%, 90%). It is also important to note that the point forecast (“most likely” or expected value) is the same regardless of the confidence limit settings.


Can the impact of adjustments to the statistical forecast be realized or phased-in over multiple periods?
Yes, adjustments can be made to period forecasts or over a forecast range.

Do you have a student demo of forecast pro?
No, we do offer special academic pricing on individual licenses at a very substantial discount. We also offer academic site licensing for use as a teaching tool in a classroom setting.

Due to the nature of our business, we have substantial data lags - does this pose a problem for the system?
Forecast Pro takes the data as it is presented, meaning it will read, display and analyze as much history as you have in the input file. You do want to be careful that all periods are full periods. For instance, you wouldn’t want to be analyzing monthly data where the latest month is partial due to the fact that the month hasn’t closed yet.

Do you track the manual overrides and compare those overrides to the stat forecast and report out on them?
Forecast Pro does provide audit reports of all adjustments/overrides which include the original statistical forecast as well as the forecast changes.
Forecast Pro takes the data as it is presented, meaning it will read, display and analyze as much history as you have in the input file. You do want to be careful that all periods are full periods. For instance, you wouldn’t want to be analyzing monthly data where the latest month is partial due to the fact that the month hasn’t closed yet.

Do you track the manual overrides and compare those overrides to the stat forecast and report out on them?
Forecast Pro does provide audit reports of all adjustments/overrides which include the original statistical forecast as well as the forecast changes.

Quantrix Questions:

What kind of performance can I expect if I integrate the forecast for 10,000 sku's at the weekly level to a Quantrix model?
We find that on typical computer systems (2.0+ GHz processer, 1GB of RAM) Quantrix can handle model sizes in the 30-40MM cells range. Calculation times on these models tend to be 5-10 minutes long. 10,000 SKU’s seem reasonable, but it depends on how big the overall model is.

Could a supply chain be modeled in Quantris, where raw material units are entered, multiplied by a yield, and a cycle time applied, to determine supply, and then compare with sales and show projected inventory?
Yes, Quantrix is an ideal solution for modeling complex business cases such as supply chains. Quantrix offers a free form, yet structured environment to build models specific to your business needs. In addition to self-teaching materials on our website, We have a Professional Services division that can give you detailed on-site assistance in creating your models.
 
Is Quantrix abile to summarize in quarters and years?
Yes, Quantrix can summarize the Quarter and Year dimensions in a model. You might find this time category rollup sample model on our website useful:

http://www.quantrix.com/Templates.htm#tc

Is Quantrix capable of importing pre-defined models (e.g. pivot tables) with pre-defined dimensions and hierarchies, or pre-defined formulas?
Quantrix does not have a direct import from Excel capability. However, there are many techniques to creating Quantrix Models based on spreadsheets. Please review our Modeler Note and Webinar pages for additional information.

http://www.quantrix.com/Webinar_Series.htm

http://www.quantrix.com/Modeler_Notes.htm

Additionally, we have a professional services division that can offer detailed help in reengineering your spreadsheets to flexible and dynamic Quantrix models. More information on Professional Services can be found here:

http://www.quantrix.com/conversion.htm

Is Quantrix able to handle foreign currency exchange rates?
Yes, foreign currency exchanges rates are treated as a dimension within Quantrix.  With DataLink, Quantrix can connect to web based XML data sources. Quantrix customers have successfully connected and utilized the Federal Reserve Bank of New York XML data sources found here:

http://www.newyorkfed.org/xml/fx.html

To learn how to use DataLink watch this webinar:

http://www.quantrix.com/Webinar_Series.htm#DMQ

If this business case took approx 35 minutes to build using Forecast Pro/Quantrix can you estimate how long it may have taken to construct using a typical spreadsheet method?  **** number of formulas etc.****
We did not attempt to build this model in spreadsheets but feedback from customers indicates that developing models in Quantrix takes considerably less time than spreadsheets.  Also, the number of formulas required and maintained in Quantrix is typically exponentially less.  One customer with a particularly large, complex model reported a 1000 to 1 reduction. 

Our clients actuals are through different periods depending on the client/product - does this pose a problem?
If each customer has its own model, the time dimension can be modified on a model by model basis, so it should not pose a problem.

If you make a change in the forecast, how easily can you then get that data to Quantrix?
The DataLink functionality can easily update predefined links to update the model with new data.
 
By chance, was this demo recorded so we can download it and review it at a slower pace to absorb it better?
Yes, the Webinar was recorded.  Click on the link above to view the flash file.  Please be patient as it may take a few moments for the buffer to load.

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