Demystifying Forecasting: Myths versus Reality
It has been an exciting time for the field of demand forecasting. All the elements are in place to support demand forecasting from a fact-based perspective. Advanced analytics has been around for well over 100 years and data collection has improved significantly over the past decade, and finally data storage and processing capabilities have caught up. It is not uncommon for companies' data warehouses to capture and store terabits of information on a daily basis, and parallel processing and grid processing have become common practices. With improvements in data storage and processing over the past decade, demand forecasting is now poised to take center stage to drive real value within the supply chain.
What's more, predictive analytics has been gaining wide acceptance globally across all industries. Companies are now leveraging predictive analytics to uncover patterns in consumer behavior, measure the effectiveness of their marketing investment strategies, and optimize financial performance. Using advanced analytics, companies can now sense demand signals associated with consumer behavior patterns and shape future demand using predictive analytics and data mining technology. They can also measure how effective their marketing campaigns are in driving consumer demand for their products and services, and therefore they can optimize their marketing spending across their product portfolios. As a result, a new buzz phrase has ...