Why do companies not produce better forecasts overtime? An organisational learning approach

This paper considers the forecasting practice of a U.K. branch of a major international pharmaceutical company. The company uses a Forecasting Support System to prepare system forecasts, which are later 'judgmentally' adjusted to produce a set of final forecasts. Although it is anticipated that as the company gains experience and becomes familiar with its product, its ability to forecast at the stock keeping unit level will improve, an analysis of forecasts for 136 products over a 24-month period shows that this is not the case. This present study speculates as to the possible reasons behind what is ostensibly a failure to learn and draws on key concepts from organisational learning in an attempt to explain what may be happening.