Insights
It's not a forecasting problem. It's an alignment problem.
I sat in an IBP review once where the sales forecast, the operations plan, and the finance target were off by 22% from each other. Not in some obscure product line — across the entire portfolio. Everyone in the room knew it. Nobody said it out loud. We spent two hours reviewing slides that were built on three different versions of reality, and then we moved to the next agenda item.
That meeting cost the company millions of dollars in the quarter that followed. Not because the forecast was wrong. Because the organization couldn't agree on a single version of the truth fast enough to do anything about it.
People always blame the forecast. "The forecast was off." Sure, the forecast is always off — that's literally the nature of forecasting. The question isn't whether the forecast is accurate. The question is whether the organization can respond when it isn't.
And in most of the organizations I've worked in, the answer is: not fast enough. Sales adjusts their number in week three. Operations doesn't see it until the monthly review. Finance is still working off the annual plan. By the time everyone's looking at the same page, you've already committed inventory, locked production schedules, and made promises to customers you can't keep.
The planners and analysts — the people closest to the actual data — they usually know there's a problem weeks before it shows up in a dashboard. But the escalation path is slow, the data lives in six different spreadsheets, and nobody wants to be the person who walks into a leadership meeting and says "the number is wrong" without a PowerPoint to prove it.
I've seen companies spend seven figures on planning software and still have the same alignment problems twelve months later. The tool is fine. The tool is great, actually. But you can't software your way out of a process problem, and bad demand planning is almost always a process problem.
What actually works: a monthly cadence — not quarterly, monthly — where Sales, Ops, and Finance sit in the same room and reconcile their assumptions before they become plans. Not review the plan. Reconcile the assumptions. There's a huge difference. One is a presentation. The other is a negotiation. And the negotiation is where the alignment happens.
The other thing: make the cost of misalignment visible. Right now, in most organizations, a demand miss shows up as a supply problem. The person who gets the phone call is the logistics coordinator, not the sales leader who sandbagged the forecast. Until the cost flows back to where the decision was made, nobody has an incentive to fix the input.
This isn't complicated. It's just uncomfortable. And uncomfortable work is the kind most organizations keep putting off.
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