When one hears the term “analytics”, it’s best to look closely at what exactly is meant. In his book “Mining Your Own Business”, an excellent read for decision makers, Deal & Pilcher describe ten levels/types of analytics and give expert guidance on leading analytics projects. There are three broad levels that generally apply: descriptive, predictive, and prescriptive. At its heart, analytics is a forward-focused endeavor but utilizes the past (and expert knowledge) to build a model of possible futures.

Forecasts are like school children — some are well behaved and do what is expected, but some need supervision. When implementing automated demand planning, it is important to know which SKUs you expect to receive accurate forecasts and which ones will require special treatment.

Making the effort to keep this assessment fresh will streamline your process and improve your decision-making all the way through to who is accountable for the item’s performance and whether to continue offering it. Poor forecasts can also be valuable because they can inform you that demand patterns are changing.