Good forecasting for health commodities for both short- and long- term horizons can be very beneficial for supply chain planning. Good forecasts help reduce wasted inventory and improve availability of health commodities. Expectations of having good forecasts make various decision-makers, such as donors, procurement agents and medical personnel, less anxious about being involved in supporting the delivery of the health commodities. In some cases, poor forecasts can prohibit global or local markets for the health commodity from growing at a reasonable rate.
Good forecasting is impossible without good data. The data required for forecasting not only includes data on disease burdens but also data on capacities/resources across the supply chain. Without good data on capacities/resources across the supply chain, it is impossible to know whether observed demand is the result of shortages in the supply chain or actually reflects true demand. Similarly, predictions of observed demand should account for the capacities/resources that will be available in the supply chain at future dates. Lack of functional MIS systems that can help provide some of this data compromises forecasting and creates uncertainties for all participants in health delivery. Conversely, the presence of a functional MIS system supports forecasting and raises expectations for benefits from forecasting to continue.
-Noel Watson is a Research Associate with the Center for Transportation and Logistics at the Massachusetts Institute of Technology