In the past, we have argued why purchasing should have equal stature in business with sales and marketing. We noted similarities between them - both provide a major impact on the business and build outside relationships that are favorable to the business. Yet another similarity that both groups deal with is uncertainty. Uncertainty of business activity in the future is the prime concern of forecasting. Sales or marketing forecasts demands on the business, while purchasing forecasts for uninterrupted supply to the business.
Good forecasts are worth their weight in gold.
In many cases, large inventories, high materials costs and major shortages can be avoided with rigorous, scientific-based purchasing forecasts. Gathering external data related to the business and industry. Using all data to hedge purchases for favorable pricing, inventory levels and timing needs. The obvious source of internal data that purchasing contends with is the marketing forecast itself. Whereas a marketing forecast deals with end products or sales dollars, purchasing must convert marketing data to a forecast for supporting materials and components.