Here's a question that may have an all-too-familiar ring: "Will you achieve your budget and production target this year?" Answering this one can be tough, as it requires making some kind of a forecast. But forecasts are often unreliable, to the extent that some managers consider them almost useless. The disenchantment with forecasts is due in part to the limitations of current forecasting practice, and also to the limitations of software currently in use to create forecasts for pharmaceutical products. We encountered these challenges in our company, Switzerland-based Novartis Pharma AG, a pharmaceutical manufacturer. We'll examine how we addressed the challenges and overcame them with a process we called assumptions-based forecasting.
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