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It’s Budget Season – Time to Align Supply Chain, Sales and Finance!

By Jeff Marthins

For many, this time of year begins the Fall season. The leaves start to turn, temperatures drop, and Halloween and Thanksgiving are right around the corner. This time of year is also budget season! 

In my early days of demand planning, it was a real challenge to get the sales team to buy-in to statistical forecasting. Often they looked at me as an outsider, creeping in on their domain – a wizard of sorts pulling a forecast out of thin air. Looking back, it made sense. These were people who lived in the world of sales, dealt with key accounts, and understood their business. The budget process was based on multiplying the previous year with a pre-determined percentage of growth. Simple but not effective.

I persisted and explained how statistical forecasting uses trends and seasonality. I further showed how an unbiased statistical-based forecast could be the foundation for their budgets. We worked through and broke down the many drivers for demand. I realized that while these concepts were not foreign, they just hadn’t been introduced this way using terminology such as MAPE, R-squared, and coefficient of variability before. It was an important lesson for me early in my career – communicate in the language that resonates with the audience; don’t complicate matters with unfamiliar terms.

As we went through this process, I started to introduce them to new tools and showed them how they could even generate a highly accurate and reliable forecast with just a few clicks of a button. It didn’t take long until they started to come to me for help with their budgets. They quickly saw the value of dedicated solutions to generate a base line unbiased statistical forecast that they could then add their insights to generate a budget. 

Today it is much easier. For example, with ForecastX, we are able to quickly looked at trends, seasonality, past events, and other demand drivers to create a more accurate forecast. And, more importantly, a forecast they can be confident in when explained to the leadership. With the flexibility to easily add or remove new products and, and make adjustments on the fly, the forecast takes on new strength. 

Supply chain has become a household term over the past 18 months. Working with companies, I’ve seen their excitement and enthusiasm grow. Data-based insights into promotional calendars and lifts provide a window into not just what is happening now but helps them envision what is possible. They can see the insights in both units of measure and revenue fostering greater collaboration between supply chain and finance.

When you bring the power of supply chain and finance together, get them aligned, accurate and feasible budgets are generated in a fraction of the time. That leaves more time for selling, connecting with customers, and since it is Fall, raking the leaves.

How are you spending your Fall budgeting season? Wrangling hundreds of spreadsheets or collaborating with your team to generate a forecast with a few clicks of the button? Maybe you too can join others who have achieved significant benefits including forecast error reduction of more than 50% YoY.

Learn how to create an accurate forecast in minutes!