30 WESTERN PALLET
The always insightful Guy Gruenberg recently returned to WPA this August to offer an online session the art and science of forecasting within the pallet industry. Studies show that groups armed with basic information can often make better predictions than even the top experts. Here are some of the key takeaways from Guy’s presentation.
Forecasting is different than predicting
Forecasting and predicting in business are related concepts but differ significantly in their approaches and outcomes. Predicting is often based on intuition, past experiences, or limited data. It's a more informal process that doesn't always rely on in-depth analysis. Predictions can be useful for short-term decisions but are not always reliable over time, as they may lack the structured approach required to deal with complex business environments.
On the other hand, forecasting involves a more systematic and data-driven approach. It uses historical data, trends, and statistical models to provide a range of possible outcomes and probabilities, helping businesses make more informed and strategic decisions. Guy Gruenberg highlighted the importance of this distinction, saying, “Forecasting is about making decisions. That’s what it’s about.” He emphasized that when companies interface with customers and gather data points, they are able to better understand future demand and inventory needs.
Use more data points
Gruenberg emphasized that companies can improve their forecasting by gathering more data points from customers and others. “When you go out and you're interfacing with your customers, they’re giving you data points,” he explained. “And that’s helping you predict what they’re going to buy, what you need to do to keep the business.” Small and medium-sized companies can take simple steps like regularly talking to customers to understand their needs and trends. This helps businesses anticipate demand shifts and inventory requirements.
In addition to customer engagement, companies can track key performance indicators (KPIs) such as sales trends, production efficiency, and inventory turnover to improve their forecasting. Analyzing competitor behavior, such as changes in pricing or product offerings, can provide valuable insights into market conditions.
Gruenberg also encouraged companies to do competitive analysis, as it helps identify areas where they can improve. By combining customer feedback, internal data analysis, and competitive intelligence, even smaller businesses can make more accurate forecasts, better navigate market uncertainties, and avoid being "frozen" by unpredictable shifts in the business environment.
Forecasting immediacy matters
Timely forecasting matters. “One of the things that you probably remember is how fast you raised prices,” he said. “Do you remember how fast you raised prices when lumber was shooting up? And most of our customers didn't really complain? They they accepted and swallowed the increases. And when lumber was coming down some of us didn't lower prices. We didn't communicate with customers, and they switched.
“Pay attention to the speed of change when you are forecasting.”
Economic recovery may be slow, follow the money
In Guy Gruenberg's presentation, he touches on parts of the U.S. economy that may remain stable or experience growth, even in a potential downturn, but he doesn't explicitly answer the question in full detail. He suggests that certain essential sectors, like food, produce, and medicine, tend to perform more consistently during economic downturns. Gruenberg encourages companies to focus on vertical markets tied to these essential goods, stating, “Follow the money, right? We know that food and produce and medicine... there are certain essentials that are out there.”
He also implies that companies in specialty markets, like those producing custom or specialty pallets, may have opportunities for growth. Gruenberg points out that several pallet companies he talks to are expanding into specialty packaging as a strategy to maintain profitability in tough times.
While Gruenberg does not give a comprehensive analysis of all sectors poised for stability or growth, his focus on essentials like food, agriculture, and specialty markets indicates that these areas are more likely to withstand economic challenges.
Guy Gruenberg did not directly address where the U.S. economy is headed in 2025 regardless of the outcome of the presidential election. However, he did express caution about making long-term predictions, especially in uncertain economic times. He mentioned that it is difficult to predict even a year out, much less multiple years, saying, “It’s difficult to predict a year out... If you could just be right for the next three months at a time, that would be amazing.”
Gruenberg also suggested that, at least for the first six months of a new presidency, the election result might not have a significant impact on business conditions. Instead, he encouraged companies to focus on short-term forecasting and adaptability, noting that factors like customer behavior, market trends, and internal decision-making are more immediately important than political outcomes.
Difficult Conversations with Customers
Open communications with customers is critical. “I believe that there is a time, if you have a relationship that you can share what it costs to make a pallet with your customer if they're buying pallets under the cost of the pallet,” he said.”That's not good business for them. It’s not sustainable.
“Do you think you can have those conversations?,” he continued. “I've had those conversations and they're usually received fairly. Customers don't want to be gouged, and they understand. In order for you to stay in business. You have to make a fair profit.”
The always insightful Guy Gruenberg recently returned to WPA to offer an online session the art and science of forecasting within the pallet industry. Studies show that groups armed with basic information can often make better predictions than even the top experts. Here are some of the key takeaways from Guy’s presentation.
Forecasting is different than predicting
Forecasting and predicting in business are related concepts but differ significantly in their approaches and outcomes. Predicting is often based on intuition, past experiences, or limited data. It's a more informal process that doesn't always rely on in-depth analysis. Predictions can be useful for short-term decisions but are not always reliable over time, as they may lack the structured approach required to deal with complex business environments.
On the other hand, forecasting involves a more systematic and data-driven approach. It uses historical data, trends, and statistical models to provide a range of possible outcomes and probabilities, helping businesses make more informed and strategic decisions. Guy Gruenberg highlights the importance of this distinction, saying, “Forecasting is about making decisions. That’s what it’s about.” He emphasizes that when companies interface with customers and gather data points, they are able to better understand future demand and inventory needs.
Gruenberg also pointed out that companies excelling at forecasting are more successful at landing large accounts and staying ahead in competitive markets. “They're not doing things that you can't do. Those are all things that you can do,” he noted, encouraging businesses to embrace forecasting to avoid being paralyzed by market uncertainties. Forecasting allows companies to anticipate changes and prepare for multiple outcomes, while predictions are often reactive and less adaptable to unforeseen shifts.
Use more data points
Gruenberg emphasized that companies can improve their forecasting by gathering more data points from customers and others. “When you go out and you're interfacing with your customers, they’re giving you data points,” he explained. “And that’s helping you predict what they’re going to buy, what you need to do to keep the business.” Small and medium-sized companies can take simple steps like regularly talking to customers to understand their needs and trends. This helps businesses anticipate demand shifts and inventory requirements.
In addition to customer engagement, companies can track key performance indicators (KPIs) such as sales trends, production efficiency, and inventory turnover to improve their forecasting. Analyzing competitor behavior, such as changes in pricing or product offerings, can provide valuable insights into market conditions. Gruenberg also encouraged companies to do competitive analysis, as it helps identify areas where they can improve. By combining customer feedback, internal data analysis, and competitive intelligence, even smaller businesses can make more accurate forecasts, better navigate market uncertainties, and avoid being "frozen" by unpredictable shifts in the business environment.
Forecasting Immediacy Matters
Timely forecasting matters. “One of the things that you probably remember is how fast you raised prices,” he said. “Do you remember how fast you raised prices when lumber was shooting up? And most of our customers didn't really complain? They they accepted and swallowed the increases. And when lumber was coming down some of us didn't lower prices. We didn't communicate with customers, and they switched.
“Pay attention to the speed of change when you are forecasting.”
Economic recovery may be slow, follow the money
In Guy Gruenberg's presentation, he touches on parts of the U.S. economy that may remain stable or experience growth, even in a potential downturn, but he doesn't explicitly answer the question in full detail. He suggests that certain essential sectors, like food, produce, and medicine, tend to perform more consistently during economic downturns. Gruenberg encourages companies to focus on vertical markets tied to these essential goods, stating, “Follow the money, right? We know that food and produce and medicine... there are certain essentials that are out there.”
He also implies that companies in specialty markets, like those producing custom or specialty pallets, may have opportunities for growth. Gruenberg points out that several pallet companies he talks to are expanding into specialty packaging as a strategy to maintain profitability in tough times.
While Gruenberg does not give a comprehensive analysis of all sectors poised for stability or growth, his focus on essentials like food, agriculture, and specialty markets indicates that these areas are more likely to withstand economic challenges.
Guy Gruenberg did not directly address where the U.S. economy is headed in 2025 regardless of the outcome of the presidential election. However, he did express caution about making long-term predictions, especially in uncertain economic times. He mentioned that it is difficult to predict even a year out, much less multiple years, saying, “It’s difficult to predict a year out... If you could just be right for the next three months at a time, that would be amazing.”
Gruenberg also suggested that, at least for the first six months of a new presidency, the election result might not have a significant impact on business conditions. Instead, he encouraged companies to focus on short-term forecasting and adaptability, noting that factors like customer behavior, market trends, and internal decision-making are more immediately important than political outcomes.
Difficult Conversations with Customers
Open communications with customers is critical. “I believe that there is a time, if you have a relationship that you can share what it costs to make a pallet with your customer if they're buying pallets under the cost of the pallet,” he said.”That's not good business for them. It’s not sustainable.
“Do you think you can have those conversations?,” he continued. “I've had those conversations and they're usually received fairly. Customers don't want to be gouged, and they understand. In order for you to stay in business. You have to make a fair profit.”
Forecasting for Business Success