Why companies struggle every holiday season

There is nothing unexpected about the holiday season. Manufacturers and retailers know it is coming, understand its importance, and have years of experience to inform strategic plans. Yet as the third quarter closes, many companies begin behaving as though something extraordinary is about to happen. Demand plans get another look. Inventory, capacity, and supplier commitments receive greater scrutiny. Meetings multiply. Leaders ask what extraordinary measures will be necessary to navigate the holidays and deliver year-end results. By then, it is probably too late. It’s not too late to expedite a shipment, reposition inventory, or change a promotion. But it’s too late to build the management capabilities necessary to deal effectively with uncertainty. More importantly, many companies are trying to solve the wrong problem. THE DIFFERENCE: A FORECAST AND A PLAN It is impossible to perfectly predict holiday demand. Forecasts and demand plans can help. A forecast is a prediction, an informed estimate of what future demand might be. Like a weather forecast, it provides useful information. A demand plan goes further. It converts that expectation into an intentional business commitment: wh…