Fully understanding firms' demand, i.e., what drives and what makes it change, is the only effective way to help any organization quickly and consistently drive out costs and increase customer satisfaction. Achieving accurate forecast is critical. Despite substantial commitment to forecasting many companies do not feel they are getting their money's worth. In order to understand the practice of forecasting in Indian firms, we conducted an exploratory survey. We looked into, the use of forecasting techniques and the practice of demand planning in Indian firms. Results indicate that the forecasting practices are still dependent on time series methods or rule of the thumb. Demand has become dynamic but the organization forecasting techniques have remained static. The organizational design does hinder the process of forecasting demand. The firms need to define new structures, processes and linkages between structures and processes.

Fully understanding a firm's demand i.e., what drives and what makes it change, is the only way to effectively synchronize your organization to quickly and consistently drive out costs and increase customer satisfaction. Achieving an accurate demand forecast is critical to achieving these goals. The objective of any supply chain initiative is to bring the penetration point (a point on the time axis where demand side information meets supply related information flow) as closer to the supply as possible. Since supply chains today rarely operate in the make-to-order mode, predicting or forecasting demand is the key driver on which all supply decisions will depend.

Forecasting is an activity, which is no longer associated with the logistics function. Nonetheless, a well-designed forecasting system can contribute significantly to the firms' performance. It can help to both lower inventory cost and improve customer service. But despite substantial commitment to forecasting and availability of a wide range of techniques, many companies do not feel that they are getting their money's worth. There is no dearth of forecasting techniques. Due to the volatility in the demand patterns, even time horizons are being compressed further. Companies are now scanning an ever-increasing set of variables that could affect demand.

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