{"id":26715,"date":"2021-02-03T20:58:41","date_gmt":"2021-02-04T00:58:41","guid":{"rendered":"https:\/\/www.shortform.com\/blog\/?p=26715"},"modified":"2021-02-14T23:45:15","modified_gmt":"2021-02-15T03:45:15","slug":"build-to-forecast","status":"publish","type":"post","link":"https:\/\/www.shortform.com\/blog\/build-to-forecast\/","title":{"rendered":"Build to Forecast: Predict Demand &#038; Plan Output"},"content":{"rendered":"\n<p>What does build to forecast mean? How does it help with productivity? <\/p>\n\n\n\n<p>Build to forecast is one productivity strategy where manufacturers predict how many items they&#8217;re going to need, and build enough to satisfy demand. This is usually a reliable productivity strategy. <\/p>\n\n\n\n<p>Keep reading to find how how to build to forecast.<\/p>\n\n\n\n<!--more-->\n\n\n\n<h2 class=\"wp-block-heading\"><strong>Build to Forecast<\/strong><\/h2>\n\n\n\n<p>The second strategy is building to forecast, in which <strong>manufacturers <\/strong>(or managers) <strong><em>predict <\/em>how many orders they\u2019re going to get for each product and build enough to satisfy them.<\/strong> The advantage of build to forecast is that customers don\u2019t have to wait for products. (If manufacturers waited until they <em>had <\/em>orders to start building\u2014referred to as the \u201cbuild to order\u201d method\u2014customers would have to wait longer for their products.)<\/p>\n\n\n\n<ul class=\"wp-block-list\"><li>Manufacturing example: Intel builds computer parts to forecast this because their throughput times are long and customers don\u2019t want to wait for products.<\/li><li>Business example: As a manager, you can use your calendar to help you forecast demands on your time and how you\u2019ll schedule them. The limiting step (the step that takes the longest or is most important) is scheduled firmly and the non-time-sensitive ones can offset where there\u2019s space.&nbsp;<\/li><\/ul>\n\n\n\n<p>Both sales and manufacturing forecast so that both departments are accountable for meeting their predictions, and they use stagger charts to help with accuracy.&nbsp;<\/p>\n\n\n\n<p>The disadvantage of building to forecast is that if the predictions <em>are <\/em>wrong, manufacturers end up with a bunch of leftover inventory or lack the inventory customers do want. However, this is still preferable to making customers wait.<\/p>\n\n\n\n<p>Delivering built-to-forecast products involves two simultaneous processes with their own timelines. Ideally, both flows finish at the same time:<\/p>\n\n\n\n<ol class=\"wp-block-list\"><li><strong>Manufacturing flow<\/strong>, which involves getting the raw materials through production, to being finished goods, to the shipping dock.<\/li><li><strong>Sales flow<\/strong>, which involves <a href=\"https:\/\/www.shortform.com\/blog\/how-to-get-customers\/\">finding customers<\/a>, selling them the product, securing an order, and then shipping it.<\/li><\/ol>\n\n\n\n<p><strong>However much you plan, it\u2019s rare that the two flows line up exactly<\/strong>\u2014sometimes, customers change their minds or there\u2019s a mistake in the manufacturing process\u2014which is where the slack (extra time or resources) you left in the system will come in handy.<\/p>\n\n\n\n<p>Some businesses use both building to order and building to forecast\u2014for example, the breakfast cafe builds breakfast to order (cooks only start cooking after a customer has ordered) but buys raw inventory (purchases eggs, toast, and coffee) based on forecasted demand because it\u2019s not possible to acquire it instantly.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>What does build to forecast mean? How does it help with productivity? Build to forecast is one productivity strategy where manufacturers predict how many items they&#8217;re going to need, and build enough to satisfy demand. This is usually a reliable productivity strategy. Keep reading to find how how to build to forecast.<\/p>\n","protected":false},"author":5,"featured_media":7885,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[45,14,25],"tags":[205],"class_list":["post-26715","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-business","category-management","category-statistics","tag-high-output-management","","tg-column-two"],"yoast_head":"<!-- This site is optimized with the Yoast SEO Premium plugin v24.3 (Yoast SEO v24.3) - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Build to Forecast: Predict Demand &amp; Plan Output - Shortform Books<\/title>\n<meta name=\"description\" content=\"Build to forecast is a strategy where manufacturers predict the quantity of product needed, and then create product to fit those numbers.\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.shortform.com\/blog\/build-to-forecast\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Build to Forecast: Predict Demand &amp; Plan Output\" \/>\n<meta property=\"og:description\" content=\"Build to forecast is a strategy where manufacturers predict the quantity of product needed, and then create product to fit those numbers.\" \/>\n<meta property=\"og:url\" content=\"https:\/\/www.shortform.com\/blog\/build-to-forecast\/\" \/>\n<meta property=\"og:site_name\" content=\"Shortform Books\" \/>\n<meta property=\"article:published_time\" content=\"2021-02-04T00:58:41+00:00\" \/>\n<meta property=\"article:modified_time\" content=\"2021-02-15T03:45:15+00:00\" \/>\n<meta property=\"og:image\" content=\"https:\/\/s3.amazonaws.com\/wordpress.shortform.com\/blog\/wp-content\/uploads\/2020\/03\/leanstartup-vanitymetrics.jpg\" \/>\n\t<meta property=\"og:image:width\" content=\"685\" \/>\n\t<meta property=\"og:image:height\" content=\"402\" \/>\n\t<meta property=\"og:image:type\" content=\"image\/jpeg\" \/>\n<meta name=\"author\" content=\"Carrie Cabral\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"Carrie Cabral\" \/>\n\t<meta name=\"twitter:label2\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"2 minutes\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\/\/schema.org\",\"@graph\":[{\"@type\":\"Article\",\"@id\":\"https:\/\/www.shortform.com\/blog\/build-to-forecast\/#article\",\"isPartOf\":{\"@id\":\"https:\/\/www.shortform.com\/blog\/build-to-forecast\/\"},\"author\":{\"name\":\"Carrie Cabral\",\"@id\":\"https:\/\/www.shortform.com\/blog\/#\/schema\/person\/2ababb7c63a94ff5d2190f71dc417d56\"},\"headline\":\"Build to Forecast: Predict Demand &#038; 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