Product demand ebbs and flows with changes in marketplace preferences, prices, competition, advertising, and e-commerce. Understanding when and why demand rises and falls helps you sync your sourcing, production, and distribution operations with real demand, which maximizes supply chain efficiency.
Following are some tips to help you accurately forecast buying trends, which should better inform your inventory levels and operational processes, and help you develop appropriate strategies for varying levels of sell-to and sell-thru demand.
Forecasting is an imperfect science that depends on experience, judgment, and historical data to create an informed estimate of what your buyers will do in the near-term. There are a variety of forecasting methods available, and you can use one or more of them for maximum effect:
- Increase product sales: When you forecast your customer’s purchasing trends, you can adjust production upward to meet anticipated demand. You can change your distribution channels so that peak time on store shelves offers your products ahead of the competition.
- Decrease inventory waste: Excess production means excess inventory, higher carrying costs, and less profit. Additionally, you’re wasting manufacturing, transportation, and storage resources. Forecasting gives you a better view of demand and more optimized inventory levels. When your forecast indicates that demand by customers is slipping, you can adjust production schedules to reduce the use of valuable warehouse and retail space.
- Streamline data integration inventory management: Forecasting lets you enjoy other benefits associated with the gathering and sharing of data in real time. With an inventory management system, every part of your supply chain can collect, analyze, and share data. This lowers the risk of forecasting mistakes while improving logistics. In turn, this improves the transparency and visibility of your supply chain to your suppliers, manufacturers, distributors, and retailers, enabling better management processes.
- Gain insight into supply chain fluctuations: The most valuable supply chain management software is that which smooths the processes of forecasting the supply chain and synchronizing supply-and-demand sequences based on real-time information. This helps eliminate unused products. The software monitors inventories and electronically orders from its suppliers in cases of downstream demand sensing.
- Negotiate better value-chain terms with buyers and suppliers: When you use supply chain forecasting software, you show your suppliers that you are in business for the long-term. This lets you negotiate better pricing for all (as a value chain), especially when you share your forecasting techniques and findings with vendors.
Enterprise supply chain forecasting
Getting started is easy. Contact Vanguard Software. Vanguard IBP for Supply Chain matches advanced analytics with a workflow design that fosters communication and tracks the inputs and actions of diverse users. This brings into shared view the oft-missed planning criteria, such as promotions, cannibalizations, competitor actions, supply changes, and phase-outs. Vanguard IBP for Supply Chain brings together inputs from multiple teams to improve visibility and transparency and speed projects along. Contact us to arrange a no-obligation demo and a free trial.