One of the more interesting and thoughtful presentations on the first day of the SASF2010 Business Forecasting Conference was given by a senior manager from MillerCoors by the name of Kevin Nitz. According to his bio, Nitz is currently leading a team of five forecasting and demand planning professionals who have been tasked with implementing a “transformational forecasting and demand planning solution” (hence Nitz’s participation at SASF2010).

For a little over 3 years, the majority of Nitz’s focus has been on process enhancement involving the use of such analytics as causal-based forecasting. The move to causal-based forecasting begins with first shifting the management dialog inside MillerCoors to better zero-in on what is driving the business, according to Nitz. For instance, a causal-based comment would be: “We expect sales to grow 10 percent in light of new price promotions.” Such causal explanations are intended to replace more generic management explanations that have tended to rely on trends. For example: “We expect to grow by 10 percent due to recent quarter trending growth.”

This may sound like a no-brainer, but developing management routines that can help shift the dialog from trends to actions is no easy feat.

In fact, it is one of two primary goals that MillerCoors hopes to achieve as part of its forecasting transformation strategy. The first is perhaps more mainstream: To increase forecast accuracy via advanced analytical modeling.

With a little luck, we may be able to garner some more of the details behind the MillerCoors effort. If so, we’ll be certain to post a more in-depth discussion. ###