Your purchase forecasting — as opposed to the TV weatherman — needs to be flexible rather than perfect, if it’s going to succeed.

In fact, the most important aspect of purchase forecasting is the simple fact that you’re doing it, and not the accuracy of your results.

Why? Did they change the rules? No. Certainly, this type of forecasting runs against traditional forecasting, which demands attention to accuracy and judges forecasters on the results of their efforts.

That’s because it’s more important that purchase forecasters can roll with the punches of changing demands, rather set exact goals and meet them. But before you throw out your record keeping program, keep in mind that you’ll still need to accurately track what’s coming in and what’s going out. You’ll still be charged with keeping your company from running out of what it needs.

To that end, you’ll need to read some tea leaves and put on your thinking cap. That’ll help you do the planning and make the strategic decisions your company requires of you. The biggest challenge of purchase forecasting is taking into account the factors you have absolutely no control over.

Some of these factors are:

• lead times
• technology changes
• natural disasters, and
• economic swings.

This is where that flexibility comes in handy for purchase forecasters. Successful purchase forecasts must be flexible. You’ll anticipate that certain factors will change. But you — and your company — are affected by these changes, and other decisions are made elsewhere in the company based on your reaction to the changes.

By spending a little time putting together “what-if” scenarios, you’ll be in a better position to adjust purchasing plans accordingly.

Don’t worry — you’re not going it alone. You have previous records and opportunities to jump a step or two ahead.

So now’s a good time to:

• review historic ordering levels; if demand is down, ordering needs to be reduced
• run a new projection on transportation costs, in light of rising fuel prices, and
• consult with your key suppliers and work together to adjust projected orders.

 Ever get stuck in that situation where you’re at work, it’s started raining, and your umbrella is (of course) in your car? You blame the weatherman who said it wasn’t going to rain.

Purchase forecasting would be similar to having the foresight to keep one umbrella at work and one your car. 

Tags: forecast, ordering, purchasing, suppliers