Forecasting Vs Planning

16 Mar 2023

Forecasting Vs Planning

Forecasting vs Planning - recently I saw a post that distinguishes between the two. This is somewhat silly.

I know a number of you think that Sales as a function should not be involved in demand planning. But it is the Sales function that can re-write the fate of your demand forecasts through their behaviors and their own planning.

An ideal classification would have been the contrast between short-term planning and long-term planning and not the contrast between Forecasting and Planning.

All Forecasting includes two things -

A mathematical (or Arithmetic) exercise that tries to predict what could happen. Information generation that includes Sales, Marketing, Customers, Market research and partners and stakeholders. These are people that could actually affect the forecast through their behaviors. For short-term, this also could involve the constraints of what can be supplied. This is especially crucial for Financial planning and Analysis.

Demand Planning = Unconstrained Forecasts + input from the market facing stakeholders on what they are "Planning" to influence the customer or the market.

Financial Planning = Demand Planning + Constraints that will affect what we can deliver.

Long-term Planning = More Planning

See more at the following links Valtitude - Demand Planning Consulting

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