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Reduce forecast dependence instead of focusing on forecast accuracy.
Most supply chain teams spend a lot of time, effort and money in improving forecast accuracy. These include many industry leaders. However, improvement in forecast accuracy has, at the best, been marginal.
We should instead focus on reducing our dependence on forecast.
Set up a fast feedback loop to catch demand shifts early.
Work on faster response to evolving demand.
Reduce forecasting horizon for supply execution.
Develop flexibility to respond fast to various types of disruptions.
Investment in agility, both on the demand as well as on the supply side, pays off much better than investing in forecast accuracy improvement.
Agility gives a distinct competitive edge.