Implementing a Forecast Methodology as a Precursor to Lean Management

The paper aims to develop a new forecast methodology to enable an automotive manufacturer to achieve required service level agreements. The research proposes to develop a forecasting model to predict production demand accurately and thus reduce inventory, lead time to customers, improve on-time delivery and save costs. A new forecast methodology facilitated >80% forecast accuracy on distributor shipments to end customers and thus improved the manufacturer’s response to customers. The researcher shifted focus from a system driven to actual customer demand-based forecast by focusing on distributor shipments to customers rather than bookings placed with the manufacturer. It was discovered that any forecasting methodology would fail unless the underlying process were stable. Hence, the forecasting model is an enabler for applying Lean principles to enhance inventory reduction and customer lead time further. It is recommended for future research focus on how Lean tools can impact forecasting and lean manufacturing.