The Hidden Costs of Forecast Inaccuracy and How to Fix Them

As someone who has spent decades in supply chain leadership with trusted brands like Georgia-Pacific, Zep, and Clorox, I’ve seen firsthand how forecasting errors quietly erode profitability. The numbers are staggering, and businesses lose billions of dollars each year due to demand miscalculations, resulting in stockouts, excess inventory, higher costs, unhappy customers and missed revenue opportunities.

When I joined ketteQ’s Executive Advisory Board (EAB), it was because I saw how their approach to probabilistic modeling, multi-pass scenario planning, and AI-driven forecasting was changing the game. As an EAB member, I’ve had the opportunity to see how some of the biggest names in manufacturing, service, and distribution are tackling forecasting inaccuracy head-on by upgrading their supply chain planning systems to ketteQ.

The High Price of Forecast Inaccuracy

Forecast errors are more than just a nuisance; they’re silent profit killers. Consider these staggering statistics:

• The average company experiences 20-50% forecast inaccuracy, leading to lost revenue and inefficiencies (Source: Gartner).

• Inaccurate forecasts contribute to $1.1 trillion in supply chain waste globally—including obsolete inventory, rush shipments, and excess production (Source: McKinsey & Company).

• Retailers alone lose $1.75 trillion annually due to stockouts and overstocks (Source: IHL Group).

For businesses operating with razor-thin margins, these numbers aren’t just concerning; they’re unsustainable. Forecasting errors don’t just impact revenue; they ripple across operations, increasing costs, frustrating customers, and eroding trust.they’re unsustainable. Forecasting errors don’t just impact revenue; they ripple across operations, increasing costs, frustrating customers, and eroding trust.  

1. Stockouts and Lost Sales

A poor forecast can leave shelves empty when demand spikes. When you can’t deliver, customers go elsewhere.

• Take NCR Voyix, for example. Before switching to ketteQ, they struggled with demand fluctuations, leading to delayed deliveries and lost revenue. With AI-driven forecasting, they now deliver more reliably and capture more sales.efore switching to ketteQ, they struggled with demand fluctuations, leading to delayed deliveries and lost revenue. With AI-driven forecasting, they now deliver more reliably and capture more sales.

2. Excess Inventory and Write-Offs

On the flip side, overestimating demand ties up cash in bloated inventories. That’s capital that could be reinvested in growth but instead sits idle in warehouses.

• Carrier faced this challenge with its massive spare parts business. Using multi-pass scenario planning, Carrier optimized inventory levels, cut waste, and still maintained the availability customers needed.

3. Expedited Shipping and Production Costs

When forecasts are off, businesses scramble—air freight, emergency production runs, and last-minute supplier negotiations drive skyrocketing costs.

• Trimble Transportation saw a 10% productivity gain by switching to ketteQ, eliminating costly manual work and improving their ability to predict demand.

4. Disruptions Across the Supply Chain

Forecasting inaccuracy doesn’t just impact internal operations—it creates ripple effects that stress suppliers, distributors, and logistics partners.

• Johnson Controls (JCI) saw firsthand how bad forecasts created costly supply chain disruptions. With AI-powered demand planning, they improved supplier collaboration, reduced excess inventory, and made more confident decisions.

Why Traditional Forecasting Methods Fail

Legacy planning tools rely on rigid, outdated assumptions. They don’t learn, they don’t adjust, and they don’t factor in the probability of different demand scenarios.

That’s where ketteQ’s approach stands apart. Instead of assuming one static forecast will hold, ketteQ runs thousands of demand simulations to prepare for every possibility.

How ketteQ Fixes Forecasting Errors

1. Probabilistic Modeling for Smarter Forecasts

• Instead of predicting one outcome, ketteQ analyzes thousands of scenarios to assess demand variability and minimize risk.

• ACG used this approach to improve forecasting accuracy and cut down on excess stock.

2. Multi-Pass Scenario Planning to Improve Accuracy

• Unlike legacy tools that make a single pass at forecasting, ketteQ continuously refines projections, adjusting to new data in real time.

• Cosmetica Labs used this to align inventory with customer demand, ensuring fewer bottlenecks and better responsiveness.

3. AI-Driven Forecast Adjustments in Real Time

• Markets change fast. ketteQ’s AI adapts to shifting demand, supply constraints, and external disruptions, making course corrections before issues arise.

• Trimble saw immediate improvements in forecasting precision after implementing AI-powered demand sensing.

The Bottom Line: ketteQ Is the Future of Supply Chain Planning

As Chief Supply Chain Officer at Quaker Houghton, I know how difficult it is to improve forecasting when traditional systems and processes aren’t built to handle today’s complexity. That’s why so many companies are upgrading to ketteQ’s adaptive supply chain planning solutions.

As a member of ketteQ’s Executive Advisory Board, I have visibility into a growing number of manufacturers, distributors, and service organizations that have made the move to ketteQ because they can’t afford the risks of forecasting inaccuracies anymore. The shift is happening because ketteQ’s technology isn’t just better—it’s a fundamental change in how organizations plan, model risk, and execute in an uncertain world.

If your business is still relying on outdated forecasting, you’re leaving money on the table. It’s time to rethink your approach—before your competitors do.

Learn more about how AI-driven forecasting can help you change your game by reading ketteQ’s custom success stories.