What focus on forecast accuracy is typical in an S&OP process?
Many people start an S&OP process or attempt to improve it with the specific goal of improving forecast accuracy. So in almost every case, this is reviewed throughout the S&OP process. But it’s critical that a reasonable expectation of forecast accuracy exists. It’ll never be 100 percent, and rarely can it be held even in the high 90% ‘s. Also needed is an understanding that it may drift based on factors outside the control of the organization, such as customer, market place, competitive, economic, regulatory, etc. issues. What’s important is that sales performance and trends are monitored once a month and the forecast adjusted based on the latest best information, to minimize forecast errors in the future.
