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Rolling Forecast Implementation
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Introduction |
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Led an effort to design and implement a Continuous Planning/Rolling
Forecast process.
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Description |
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Our client, in the pharmaceutical industry, wanted to implement a
Rolling Forecast. With their previous planning process, the annual plan
was finalized and essentially not referred to again during the year. At year
end, a report was issued comparing plan versus actual results, but only Senior
Management received the report or had interest in it. In essence, the plan
became "credenza-ware". To address this, the company wanted to
implement a Rolling Forecast. The team assessed both a four quarter and six
quarter rolling forecast, but chose to implement the four quarter approach
since the reliability and credibility of a six quarter projection for this
company was doubted. Each division and functional area developed a driver model
to forecasts Revenue and Costs.These models were reviewed and refined by the
redesign team before going into production. Using assumptions for each driver
(some of which were developed centrally) the forecasts were developed. During
the last month of each quarter, the company projected the next four quarters
ahead. |
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Results |
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The annual planning process was eliminated, and managers took a
more vested interest in the planning process.
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