Terra Technology

Harnessing the Power of Downstream Data Through Better Mathematics

by Robert F. Byrne

Industry Week

November 15, 2010

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In a recent survey on Global Supply Chain Trends by PRTM Management Consultants, 75% of respondents consider demand and supply volatility and poor forecast accuracy to be the biggest roadblocks they currently face. Second on the list is lack of visibility into current market demand. High demand volatility and lack of visibility into consumer behavior caused manufacturers to lose money during the recession and will hamper their ability to meet consumer demand in the economic upturn. S&OP (sales and operations planning) was developed 25 years ago as a way for manufacturers to match supply with demand and access to Point of Sale (POS) data has been available for 40 years, but manufacturers are still generating forecasts that are wrong 50% of the time. Why does forecasting remain so difficult?