The demand planning group may "own" the forecast, but it can't come up with one without the aid of a team comprising sales, marketing and finance, says Joseph Eschenbrenner, global demand manager at The Timken Co. Inputs from them lead to consensus and a forecast that will the drive production, procurement and financial reporting at the manufacturer of bearings, lubricants and other products.

It seems only appropriate that a company specializing in anti-friction solutions and products would devise a way to take the pain out of the forecasting process. But The Timken Company, which has solutions to bearing and seal problems, has done just that with its so-called forecast of one, says Eschenbrenner. What that really means is that the forecasting process is by consensus.

It begins with involving every part of the company, from sales and marketing to the financial group, getting their input on an ongoing basis and factoring everyone's perspective and expertise into the equation.

The forecast, of course, then drives Timken's procurement and production. Furthermore, it drives the company's financial reporting.

Each month, market objectives and industry factors are defined, and growth for them is plotted out for two years. The sales team notifies the forecasters what structural changes have occurred through a process that Timken calls the Change in Demand Requirement.

Similar input is taken from the other departments and from customers and third-party agencies as well, Eschenbrenner says.

"We then have a process that dollarizes that forecast," he says. That takes into consideration such things as the pricing set up for each customer and exchange rates. "That becomes the consensus forecast, a forecast of one."

Gaining that consensus is a challenge, but the difficulty of achieving it has been greatly diminished as the accuracy of the forecasting methodology has proved itself again and again, Eschenbrenner says. Not surprisingly, the biggest hurdle is the general volatility of the industry as a whole.

Ultimately, while his group "owns" the forecast, it simply wouldn't be possible without every stakeholder's participation and input. But by including them in every step, their buy-in is virtually guaranteed from the get-go.

To view video in its entirety, click here