Fact Sheet

By Mel Duvall  |  Posted 05-15-2002 Print Email

Fact Sheet

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Click to download a printable version of the Supply Chain Forecasting Fact Sheet (Adobe Acrobat format).

Taking the guesswork out of forecasting is no easy task. But collaborative systems that allow manufacturers, buyers and suppliers to formulate forecasts jointly by developing systems that automatically generate orders on demand can help. Even so, accurate forecasting remains a subjective activity and a problem for IT managers.

Supply Chain Management Forecasting Technology Lets Companies…

  • Evaluate historical data to identify trends and predict demand
  • Collaborate with suppliers and buyers to formulate demand forecasts
  • Automatically create new orders based on real-time sales information
  • Decrease inventory and warehouse costs by reducing inventory hoarding
  • Track and evaluate forecasting errors to learn from mistakes
  • Adapt pricing to move excess inventory and optimize revenue


  • Improved accuracy: By getting closer to the source of demand, manufacturers can eliminate phantom orders.
  • Collaboration: Systems let manufacturers collaborate with buyers, forming more accurate forecasts.
  • Reduced costs: Manufacturers can reduce excess inventory by ordering fewer parts before demand is verified.
  • More science, less art: Historical data can be analyzed to improve trend forecasts and to learn from mistakes.


  • Sudden change: No software can predict massive or unexpected changes in the marketplace.
  • Data pollution: Data may be contaminated by special events.
  • Hoarding: Software is susceptible to companies that order excess inventory to ensure supplies.
  • Buyers' tastes: Software cannot predict market response.
  • Common sense: Software cannot replace experience and insight.

Who Could Benefit

  • Electronics/Technology: Events of the past year have shown the industry's vulnerability.
  • General Manufacturing: Knowing what to build and in what quantity is the ultimate goal of all manufacturers.
  • Retail: The ability to react to changes in the marketplace separates winners from losers.
  • Automotive: Better demand response means lower inventory costs.

Major Players

  • i2 Technologies Inc.:
    The company's supply chain management system is the industry leader.
  • SAP AG:
    The mySAP supply chain management platform has a built-in advanced planning module.
  • International Business Systems AB:
    This Swedish company's supply chain software is strong among companies with international operations.
  • Manugistics Group Inc.:
    Recently added a pricing and revenue optimization engine to its supply chain management platform.
  • J.D. Edwards & Co.:
    Offers an advanced supply chain planning module that works with its core supply chain management offering or third-party offerings.
  • Manhattan Associates Inc.:
    Company's software line offers modules for planning through to fulfillment.


Stanford Global Supply Chain Management Forum research and discussion portal

Collaborative Planning, Forecasting and Replenishment industry group, developing cross-industry standards

Source of white papers on improving supply chain efficiency published by Montgomery Research Inc.

Institute of Business Forecasting, organization dedicated to discussing business forecasting

Supply-Chain Council Inc., a grassroots organization dedicated to supply chain issues

International Mass Retail Association, providing industry research and guidance


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