Forecasting is essential to everyday life as it helps you plan your day.
We check the weather forecast to decide what to wear. We check the political polls to see if our candidate is likely to win or lose before considering buying tickets to a candidate’s fundraiser. We check the Las Vegas betting line to see if our football team is likely to win before we wager lunch with our co-worker on the outcome of a big game.
In the business world, we are constantly planning all sorts of things – production, revenue, profits at very detailed levels. Forecasting Big Data can cause nothing but huge migraine headaches if you don’t have the right power tools to help you get through it.
RoadMap GPS has been that power tool that many companies around the world have relied on to drill down into these huge data sets and give users as clear a view of the future as possible by just looking at past data.
In RoadMap GPS Commercial and Cloud editions, we have many other features to the technology, but the statistical forecasting capability has always been a core strength of the software.
With this Public Edition, we are allowing student and other non-commercial users the ability to use RoadMap GPS for educational and non-commercial use.
This edition is not designed for Ph. D. statisticians. It’s designed for students in Managerial Economics, Finance and Supply Chain Management Programs at the B.S. and M.B.A. level.
We hope that it will be useful in your research.
We also wouldn’t mind you buying RoadMap GPS Commercial Edition when you get a real job.
RoadMap’s Global Planning Solution provides four different enabling technologies that help organizations make accurate business plans for the future:
Geneva Expert System
Over the next few weeks, each of these technologies will be explained in detail on this blog – beginning with the Geneva Expert System.
The explosion of information technology created a huge challenge as well as an opportunity for business planning. Product life cycles shortened. New product launches occurred more rapidly. Point of sale and downstream distribution data gave planners a better view of consumer demand.
But forecasting was stuck back in the days of the IBM/360 mainframe computing. An old dude wearing coke-bottle glasses, tethered to a mainframe computer terminal, mumbling about autocorrelations and ergodicity, working for hours at a time on a single product forecast. There had to be a better way… and we found it.
Instead of trying to forecast sales in the 21st century using the old forecasting methods which were used to forecast sunspot data starting from the year 1750, we figured that it would make more sense to start with business data. Lots of it.
Through consulting engagements, we were able to assemble of huge database of product sales and forecasts from many of the leading global pharmaceutical companies, consumer electronics companies, and retailers. But you can’t just surround a problem with data and wait for it to surrender; we had to go on the attack. But we didn’t use traditional statisticians – we needed people who weren’t trained forecasters. We rounded up mechanical engineers, physicists, mathematicians and philosophers and turned them lose on this Big Data set with plenty of computing power.
What emerged after many iterations is the Geneva Expert System, which remains the most accurate business forecasting tool on the market today, compared to business intelligence tools and statistical packages. Let’s do a quick case study to prove our point.
Remember last summer when it was actually hot? After the first cookout in May, everyone had a great time, but the mosquitos were awful. Before the next cookout, people stocked up on Citronella candles. Let’s look at weekly sales of Citronella candles – sales in June (~2500) are 10X sales in December.
Now let’s looks at the second line – The Geneva Expert System forecast. Despite the erratic history, it automatically comes up with a model that you’d probably think was a reasonable starting point – then you could move on to the hundred or thousands of other products in your product line.
But not so if you used the leading BI tool. In that case, since the history ended around Labor Day when sales were declining, the forecast is for rapidly declining sales that end up with large negative numbers.
And the R statistical package using automated Box Jenkins? That statistical package forecasts around 880 in candle sales for each week. Like a watch that is broken being right twice a day, that weekly forecast is correct only twice a year.
For RoadMap Global Planning, the Geneva Expert System gives planners an accurate and unbiased trend projection into the future. It’s still up to the planner to assess what events are likely to “bend the trend” to arrive at an optimal forecast.
As the world’s economy continues to recover, forecasting has never been more important to an organization’s ability to successfully achieve growth.
RoadMap software is the essential technology that your business needs to analyze historical trends and gather forecast information from throughout your organization, your customers, and the World Wide Web to ensure that your company is positioned for growth.
Cloud Based Computing
RoadMap GPS is now available on the Cloud through Amazon Web Services (AWS), the largest and most trusted provider of Cloud services. With RoadMap GPS on the Cloud,growth companies can scale from proof of concept to full production systems in minutes, not months, as Amazon’s Relational Database Service and Elastic Cloud Compute (EC2) allow servers and instances to be created and scaled almost instantly. RoadMap GPS also supports “Cloud to Go” users who need to work offline while traveling and then sync their work back to the Cloud.
A Global Track Record
RoadMap has established a global track record as a leader in helping clients forecast accurately in the Americas, Europe and throughout Asia. RoadMap GPS is available in English and in Japanese versions. Our Japanese website www.roadmapjapan.com also has complete information about RoadMap GPS.
The RoadMap Advantage: Transforming Big Data into Business Intelligence
RoadMap GPS can analyze millions of transactions at the individual consumer level,such as prescription data, in a few minutes, delivering powerful and accurate forecasts. RoadMap GPS databases and Geneva forecasting engine can also be extended with the R Programming Language to build custom forecasting system using any available R package.
Award Winning Forecasting Technology
RoadMap GPS features the award winning Geneva Forecasting Engine, the most powerful and accurate forecasting software in the marketplace. Geneva has been implemented at hundreds of enterprises worldwide resulting in inventory savings of more than $1 Billion.
Sales and operations planning (S&OP) is a continuous process in most companies. In many cases, hundreds of executives and sales professionals collaborate on a business plan. It is then up to operations and manufacturing to deliver the goods on time. The design of the S&OP business process is critical and typically requires many enabling technologies:
1) Competitive Intelligence
Poor competitive intelligence is typically the root cause of most forecasting shortfalls. The business world just never seems to stay in place long enough to make complete sense. In industries such as consumer electronics, markets remain in a constant state of flux and often appear chaotic. Although perfect information about competitors is impossible to acquire, a sales and operations planning system without any means to search, collect and share competitive intelligence among planners is similar to flying blind.
2) Real Time Mobile Alerts
Smartphones and tablet computers have largely eliminated the need for most business executives to carry a laptop around. The upside to this trend is that they can be reached during any waking hour via these mobile devices, which roughly doubles the amount of time that they were previously available. The downside is that critical alerts have to be sent to them in real time, rather than expecting them to log into the corporate system and pull the information themselves. To avoid information overload, this means that alerts have to be classified. For example, if the forecast changes for a major new product or for one of the Top 10 products at your largest customer, that alert is probably worth sending to an executive’s iPhone at her son’s Little League game at 7PM on a Friday night.
Non critical alerts are still important, but can be left for sales and operations to process on a weekly or daily basis:
Forecasts Tracking Above Recent Sales History
Large Changes from Previous Forecast Versions
New Products without Forecasts
Discontinued Products with Forecasts
3) Forecasting Metrics with Industry Benchmarks
“Out last annual forecast was 97.5% accurate. Is that good?”
Well, if your last annual forecast was made in October, after nine months of actual data, then forecast accuracy for the 4th quarter was probably only around 90%. Now in the fast moving consumer goods industry (FMCG) or pharmaceuticals, 90% is an unacceptable level of accuracy. In consumer electronics, it might be acceptable, depending on where your product were in the product life cycle.
Forecasting metrics must be linked to the supply chain requirements and financial cost structure of the business. We have developed forecasting metrics that take into account each product’s lead time and gross margin, so that improved performance against that metric always shows up in the company’s bottom line. In addition, in many industries such as pharmaceuticals we have enough information on forecast accuracy by industry peers to be ale to assess and classify a company’s the sales and operations process as one of Needs Improvement, Performance in Line with Peers, or Industry Leader.
RoadMap Global Planning Solution was designed by Brand and Product Managers at leading pharmaceutical, FMCG and electronics manufacturers. It began as a way to automate and consolidate the best Excel spreadsheet formats in each department. With each version, RoadMap incorporate the computing and communications technology that Brand and Product Managers use in everyday business to ensure that sales and operations process is accurate and that it runs smoothly.