Content area
Full text
EXECUTIVE SUMMARY | This column is written to start a dialog of an advanced concept in demand forecasting, which the IBF is calling Quick Response Forecasting (QRF). It is predicated on the premise that in order to take advantage of "predictive" downstream demand signals (such as from social media) that might portend an impending demand spike or other rapid change in demand; today's forecasting and planning processes are too slow to detect and respond to them. Quick-response supply teams, put in place on an ad hoc basis, would need QRF forecasts to capitalize on revenue opportunities that "predictive" demand signals offer. In the QRF process, monitoring signals on a real-time basis will be needed to alert these teams, as a call to action. Support of Business Continuity Management (BCM) teams put in place for severe hurricanes, as well as other short-cycle time processes are discussed to illustrate some processes that might benefit from QRF.
Some time ago I was on an IBF Advisory Board conference call when members were discussing situations where social media data were signaling rapid changes in demand for products. These data might, for example, include some favorable online reviews of products, as well as a rise in the consumer intent to try or buy them. I listened for a while as members stated these were great "predictive" downstream demand signals, but since they were signaling rapid changes in demand, members believed their current forecasting processes could not incorporate the information quickly enough to act upon it. I blurted out: "We need to start thinking about Quick Response Forecasting (QRF) techniques," making up the term. While all agreed that the term captured what was being discussed, everyone pondered: What did it really mean?
The Board decided to include the topic for discussion at the IBF's 2017 Leadership Business Planning, Forecasting, and S&OP Forum that was held this past October in Orlando, FL. I anticipated that the demand planning panel that I was moderating would address two issues regarding QRF. The first issue was to deal with defining QRF and starting with the concept of "updating forecasts in line with 'real' and rapid changes in demand, both during and between planning cycles." The issue was that if most companies were on monthly...