Business Forecasting Concerns

Most forecasting software packages are offered solely as technology solutions. This sounds fine on the surface but is, in fact, a major impediment to maximizing the return on your forecasting investment. In reality the technology is simply an enabler and, alone, not a solution. A complete forecasting solution must be based on a forecasting software package that is not designed as an end in itself but rather as the keystone in a comprehensive forecasting process. Moreover, maximum benefit can only be garnered from the chosen forecasting solution when the entire forecasting process can be customized and molded to conform to the unique and specific organizational requirements – requirements that extend well beyond the boundaries of the act of forecasting itself.

The technology is the easy part of a forecasting implementation. More difficult (and most often ignored) is the design and specification of the optimum forecasting process as it relates to the organization’s current, specific business needs and resources. The greatest difficulty in designing a process is not in defining the quantitative issues such as “where does the data come from?”, “what reports do I want to generate?” and “what business systems does the final forecast drive?”. The real challenge is found in the qualitative issues like “do I have enough resources to manage a process of this complexity?” and, much more importantly, “does the chosen forecasting solution offer a wide enough range of tools for me to effectively manage a process of this complexity – with the resources I have?”.

This document contains a checklist of key features and benefits that a premium demand forecasting solution should be able to provide. You might want to review the following points while deciding on a forecasting solution. You’ll also see how the TimeTrends forecasting solution will be able to meet all your needs, and more.

Questions about the design and methodology of the software

• Is the software easy to use?

  The “ease of use” of a standardized Windows-based solution can provide valuable benefits.

  TimeTrends is a standard Windows solution, which interfaces seamlessly with many IT subsystems. The TimeTrends Forecast Warehouse, written in object oriented C++, conforms to Microsoft Windows user interface standards so that all operations are intuitively familiar to any user. It is not simply an add-on to an existing application like Microsoft Excel but a specialized application that is designed from the ground up with the business forecaster in mind. What this can mean to you is: reduced staff training overhead; broader compatibility across a wide range of products including ease of integration; minimized product upgrade requirements; and the ability to easily tailor the product to match customer requirements.

• Can the software manage products and services other than by simple SKU?

  This capability allows users both to construct unique hierarchies and to use the business solution for more than just forecasting.

  TimeTrends can manage products and services in relation to one another and to their positions within the company. For example, an Item in TimeTrends often represents a product-by-warehouse, product-by-customer, or some other such combination. You can group your Items within Aggregation hierarchies according to product line, vendor, customer, salesperson, price, cost, service level, unit of measure, distribution center, or in any other significant combination. Item user fields, which are used as Aggregation hierarchy building blocks, can also contain other information from any source, such as safety stock levels, forecast valuations, sales and quota management information, replenishment calculations, or any other data.

• Will the product drive S&OP by giving you more than one way of viewing your enterprise?

  This capability allows different users to look at the same information in the way that’s most appropriate to their job function.

  TimeTrends’ virtually unlimited Aggregation hierarchies, which can be comprised of an unlimited number of levels, permit many business views of the same forecast data. These unlimited hierarchies (of unlimited numbers of levels), in combination with the available unlimited user fields, empower the users and allow them to be inspired by new information vantage points.

• Can the solution providers tailor their product to the customer’s requirements?

  This capability allows different users to employ a business solution for more than just forecasting and, as such, to maximize the value of their financial investment.

  The TimeTrends turnkey solution includes consultation, setup, system integration, training, and support. ALT-C Systems can integrate TimeTrends seamlessly into a host of other diverse subsystems, and have repeatedly demonstrated their ability to customize the software to any user’s needs.

• Can the system review and let you adjust the statistical parameters for each Item?

  This capability allows the user to adjust parameters where appropriate (the alpha, beta, and gamma weighting values, for instance), to “fine tune” individual Item forecasts.

  More than a dozen statistical parameters for each Item are available in TimeTrends for review and, where appropriate, for adjustment. These parameters are set once at implementation and, thereafter, the only manual intervention occurs when an item is flagged as an exception – one that is not behaving as defined by the requirements of the business process. TimeTrends takes care of the rest automatically and the user is never required to fix what isn’t broken.

• Does the software support a variable forecast range and the ability to manipulate the values based on customer-supplied business rules?

  This capability allows users to determine the most practicable “forecast period” level of detail and then summarize or parse results to higher or lower levels of detail.

  ALT-C Systems will, in consultation with the customer, determine the basic forecast frequency that is best for the customer’s business practices. This frequency can be Weekly, 13-Period, Monthly, Quarterly or Annual. When a different frequency is needed such as for longer term reporting or more detailed output to downstream systems like MRP, TimeTrends is designed to allow for the easy inclusion of customer-specific business rules. Examples of these business rules could be production or fiscal calendar tables.

• Does the system support more than just “naïve” or focused methods?

  This capability provides a more practical reaction to product life cycles.

  The TimeTrends “Auto Select” forecasting option can automatically choose the method that demonstrates the best statistical “fit” to your data, or you can make your own choice from the 16 available growth curve, smoothing, and naïve methods. This choice of forecasting method and its associated parameters are saved, on a “per item” basis and then become part of the automated reforecasting process.

• Do you have a choice of data types?

  You have chosen the frequency with which your business reviews its status – the forecasting system should be able to adapt itself to your way of doing business.

  TimeTrends forecasts can be Weekly, 13-period, Monthly, Quarterly or Annual, on a per-database basis. Moreover, as mentioned in the preceding section on “Customer Supplied Business Rules”, TimeTrends can allow for viewing and data export in any other data type or frequency that your business requires – even daily. You are therefore able to supply the best forecast frequency for every portion of your business process.

• Does the program allow creation and viewing of multiple forecast databases?

  This capability allows users to view a wide variety of data presentations or periodic time frames.

  TimeTrends allows you to open and display more than one forecast database at a time (including multiple window views of the same database). You can also create new, empty databases of any data type for what-if scenario exploration, testing or training purposes without worrying about damaging your production database.

• Can the system be customized?

  This capability allows users to employ a business solution that handles their data the way they want it to.

  The TimeTrends user interface, as well as its spreadsheet and graphical views, can be configured on a per-user basis. Item information can be configured down to the period level for purposes such as variance reporting, budget management, quota management, and others. TimeTrends can also expand to allow for virtually unlimited additional user fields for each Item, greatly extending the range of available analysis and reporting options by forecast period.

• Can the program retain both archive information and related data?

  This capability allows users to employ a stable business solution can be used for more than just forecasting.

  TimeTrends can retain prior versions of forecasts (eight by default; an unlimited number when customized). It can also retain such information as budget figures, safety stock values, remote forecast submissions, orders, shipments, inventory or any other values based on your business requirements.

• Does the software support Internet interaction?

  This capability enables timely forecast data collection, review and challenge, confirmation functions, and greatly enhances an organization’s S&OP process.

  TimeTrends is ready for many types of Internet interaction including e-mail based notification and file transfer, reports that can be automatically published for web retrieval and a complete web-based forecast management system. The optional TimeTrends e-Forecasting module provides an Internet-enabled, web browser-based submission and review process for remote users including field-based sales staff, customers, vendors, and others.

• Does the software support an industry-standard DBMS (Database Management System)?

  This capability allows an organization to take advantage of a readily accessible pool of talent either within the company or in the marketplace.

  All of the data that TimeTrends manages is stored in an industry-standard database format, currently including the Microsoft Access, Microsoft SQL Server, and Oracle platforms.

• Does the program support widespread, non-proprietary database connectivity?

  This capability allows simple, easy-to-use interaction with the vast majority of business solutions available in today’s marketplace.

  TimeTrends connects to its supported database format files by means of generic, non-proprietary ODBC (Open Database Connectivity) functionality. ODBC is one of the components of the Microsoft Data Access Components (MDAC) system and its acceptance in the marketplace guarantees wide interoperability between TimeTrends and other business applications within your organization.

• Can the program retain significant amounts of actual historical and forecasted data?

  This capability keeps prior business experiences readily available to an organization, either for review or for transfer of prior trend patterns to new Items.

  TimeTrends can retain up to 1,040 periods of history (actuals), and up to 520 periods of forecast (future) data. In a weekly database, this corresponds to 20 years of history and 10 years of forecast. Specialized tools such as “Copy Demand Profile” are included to facilitate the creation of new items based on the behaviour of existing items that are known to exhibit similar trend activity.

Questions about productivity and user intervention

• Does the solution support overrides to the forecast as either numeric or percentage values? Can you associate annotations with your overrides?

  This capability allows users to operate in the mode with which they are most comfortable and to identify the rationale for any overrides.

  The Scenario, Promo, and Notes columns work together to permit significant intervention on an Item-by-period basis. Periodic annotations are viewable and editable from both spreadsheet and graphical views, and global annotations can also be used as a repository of messages and logging between users at the database level.

• Does the system support practical visual tools?

  This capability allows users to see the immediate graphical impact of forecasts and, when necessary, to export the results.

  TimeTrends Line graphs, Yearly Line graphs, Bar charts, Yearly Bar charts, Seasonal Bar charts, Scatter graphs, Yearly Scatter graqphs and Pie charts are immediately available from any Item view, and can be exported as bitmap images for external viewing or presentation use. Share Editor and Event Manager settings can be plotted, and query columns can also be graphed. You can display multiple Items, or multiple fields of one Item in a single graph. Most graphs can be configured in terms of selectable data source, date range, or other settings. In most Item graphs, periodic user annotations are both highlighted and editable. The Item Browsing function will allow you to see a sequence of Items in both spreadsheet and graphical views simultaneously.

• Does TimeTrends support interactive use of visual tools?

  This capability allows users to graphically compare the data of several user-defined columns in support of their decision-making processes.

  Not only can additional spreadsheet columns be added to the standard TimeTrends user interface, but they can also be selectively represented in any graph as selectable data “sources”. You could easily add a collection of different forecasts, for example, or the dollar value of sales versus costs to your tables and graphs.

• What about live data intervention using visual tools?

  This capability allows users to see the immediate visual impact of forecast adjustments, and to make associated notations.

  TimeTrends permits adjustment of forecast values and their associated notations directly from within a graph. Any period that has an associated notation is highlighted on the graph. Any adjustment that is performed in one view (graphical or tabular) is immediately reflected in all other views so that the impact of the adjustment is always apparent to the user.

• Does the solution permit goal seeking?

  This capability allows an increase or decrease in the total value of a forecast.

  TimeTrends has the ability to set a target quota or budget for an Item’s Sales or Scenario forecast range, by adjusting the results on a pro-rata basis for an entire selectable data range.

• Will TimeTrends permit a downward hierarchical intervention?

  This capability allows users to make forecast adjustments at meaningful (aggregate) levels in the hierarchies, and to then broadcast the impact through to lower levels of detail where data may be too sparse to show meaningful forecast results.

  You can use the TimeTrends Force Down function to make changes at any level in an Aggregation hierarchy and propagate those values, on a pro-rata basis, down to the lowest level (the component items) in the hierarchy.

• Does the system let you manipulate Item demand share at a particular hierarchical level?

  This capability allows users to make forecast adjustments at meaningful levels in the hierarchies, and to then broadcast the impact through higher, lower, and equal levels of detail where data may be too sparse to see meaningful forecast results.

  The TimeTrends Share Editor gives users the ability to view and adjust a selected hierarchical level in terms of “mix” or “share” (each component’s percentage contribution to the level’s total), and to re-allocate on a pro-rata basis through to the lowest level of detail in the hierarchy. This is a necessary tool for substituting Items that have variable or seasonal packaging, for instance.

• Does the system support significant industry-standard queries and reports, including third party tools?

  These capabilities allow different users to obtain the view of the data that they need in order to do their jobs efficiently.

  TimeTrends’ query and reporting functions offer extensive exception reporting capabilities and are the basis for the concept of “forecast management by exception”. ALT-C Systems will create customized queries and reports for you that will correctly mirror the manner in which you conduct your business. The TimeTrends open forecast database format also makes it easy for you to use whatever third-party reporting tools you are familiar with.

• Can the TimeTrends forecasting system identify seasonal trends?

  This capability allows users to readily see the existence of seasonal patterns in an Item’s life cycle. Any one Item’s seasonality patterns may be copied onto other Items.

  When sufficient historical data is available, TimeTrends can calculate the seasonal component of an Item and display it in a spreadsheet or graphical view (which can in turn be exported for presentation purposes). The ability to use one item’s seasonality pattern as a source for another item’s forecast opens the door for a vast array of seasonal manipulations such as the application of a product family’s aggregate seasonal trends to selected items within that product family.

• Does the system support pegging of demand to moveable events?

  This capability allows users to easily plot the existence of such promotional events in an Item’s annual forecast cycle.

  TimeTrends can account for Item demand that is associated with an event (such as Easter, Christmas or the Super Bowl) that can move from one period to another on the calendar.

Questions about efficiency and automation

• Does the TimeTrends solution support periodic migration of data from existing data sources, with no manual intervention required?

  This capability allows users to focus on their most important tasks, improves timeliness of forecast procedures and eliminates transcription errors.

  TimeTrends provides an automated update and forecast procedure that interacts robustly with your organization’s existing periodic data sources. In addition, the data being updated can be validated, split, or altered to conform to any pre-defined configuration. There is no longer a need for time-consuming, repetitive data import wizards – the entire update activity is automatically performed in the background. The TimeTrends Batch Scripting functions can even be scheduled to run overnight and reduce interruptions to the forecasting process even further.