FORESIGHT Summer 2009 Issue 14 17 attention paid to the issues of tracking changes in forecasting accuracy over time, especially for the ag- gregate of items being forecast. Foresight has begun to address this topic with a case study from Robert Rieg (2008). In practice, the portion of firms tracking aggregated accuracy is surprisingly small. Teresa McCarthy and colleagues (2006) reported that only 55% of the com- panies they surveyed believed that forecasting perfor- mance was being formally evaluated. When I asked the same question at a recent conference of forecast- ing practitioners, I found that approximately half of the participants indicated that their company tracked forecast accuracy as a key performance indicator; less than half reported that financial incentives were tied to forecast-accuracy measurement. INTRODUCTION One of the more important tasks in supply-chain man- agement is improving forecast accuracy. Because your investment in inventory is tied to it, forecast accuracy is critical to the bottom line. If you can improve ac- curacy across your range of SKUs, you can reduce the safety-stock levels needed to reach target fill rates. e desire to improve accuracy is a principal factor behind Enterprise Resource Planning (ERP) systems. Phil Robinson, an ERP implementation consultant (2008), found that the typical reported reduction in inventory levels achieved for companies utilizing ERP systems is about 30%, with some organizations reach- ing 75% reductions. I have seen a great deal of information in the forecast- ing literature on measuring forecasting accuracy for individual items at a point in time but see very little HOW TO TRACK FORECAST ACCURACY TO GUIDE FORECAST PROCESS IMPROVEMENT by Jim Hoover PREVIEW While considerable attention has been paid to the measurement of forecast accuracy for individual items at particular points in time, issues around an aggregated forecast- accuracy metric and its tracking over time still present opportunities for discussion. Jim Hoover talks about why organizations have neglected the task of tracking forecast accuracy and offers a step-by-step guide for getting back on the track.