In a survey of consumer product executives Hitachi Consulting and Consumer Goods Technology (CGT) find that although leading companies recognize the benefits of planning and forecasting, most say they are hindered by the process and time needed to do an adequate job.
Time investment for coordinating, consolidating and validating the inputs of hundreds of long-range planning stakeholders – dealing with detail at granular levels – hinders 62 percent of respondents who answered the survey. Time and effort required to produce adequate forecasting is also a serious challenge, according to 52 percent of survey respondents.
The survey findings suggest that best practices should be considered to improve both the efficiency and effectiveness of planning and forecasting processes, according to Hitachi Consulting's Greg Gough, Director Consumer Products National Team and Chris Bohner, Vice President of Business Intelligence and Performance Management. Gough and Bohner helped design the survey and provide commentary on the results in the September issue of CGT.
In addition to survey findings on how companies are managing planning and forecasting processes, Gough and Bohner believe many companies are not fully utilizing best practices, such as strategically aligned, driver-based, rolling forecasts to be more responsive to market changes.
"When market events occur, such as commodity inflation spikes, rapid shifts in consumer preferences or unexpected competitor actions, we rarely see companies with the capability to rapidly recalibrate their forecasts and take market responsive actions on price, promotion and product-mix levers," said Gough.
According to Kara Romanow, Executive Editor at Consumer Goods Technology magazine, "On the one hand, the survey results are encouraging because companies are taking this work seriously. However, the answers also reveal there is much work yet to be done."
Encouraged by the overall positive results of how companies view business planning and forecasting, Gough and Bohner believe it won't be long before market responsive companies abandon their spreadsheets and begin adopting more advanced processes and enabling toolsets.