As your business grows from a small entity to a large organization, you start selling your products on an omnichannel platform. This is where your demand forecasting needs to be accurate and prompt so that you don’t run out of stock or understock for future customer demands.
Forecasting is a vital organ of any supply chain management. Doing it properly is like being able to see the future. Hypothetically speaking, if you knew exactly what your business would sell the most, you would go and produce the exact quantity, and then you wouldn’t be worried about whether you would have the precise stock amount to ship. But if you do it without any expert working side by side with you, your forecast will always be inaccurate.
If you are looking for optimum demand planning accuracy, here are six tips for building a solid strategy for optimum demand forecasting.
Trust Data and Not Guesswork
It’s vital to remain unbiased when forecasting products or services. The best possible way to achieve this is to use data rather than guesswork alone. By relying on customer trends and historical sales data, you can develop accurate predictions about future demand without making presumptions. Put another way, data is plain, simple, and easy to trust. Many businesses use the extra hand to help them demand planning by formulating customized forecasts based on their needs and industry-related parameters. This process delivers an unbiased analysis of how your products will likely perform in future orders under various circumstances, which helps planners manage accordingly instead of guessing at numbers themselves.
Technology allows you to automate many of the processes involved in demand planning methods. For instance, using demand planning software that helps you track past sales data and identify patterns can quickly eliminate the guesswork from your end and make the entire process seamless and efficient. With every crucial information at your fingertip, you can make more informed decisions about your future production requirements.
Make The Most of Historical Data
Historical data is one of the most important resources at your disposal to predict future demand. An efficient demand forecasting software can give you an idea of how much product was sold on average at a certain point in time. You can utilize this information to determine the volume of demand there will be in the future and manage your inventory accordingly.
Avoid Human Errors
An honest mistake can cost your company thousands of dollars and set your business back for longer. That’s why automating your demand planning process is something you should seriously consider for your business. Automation leaves very little room for human error and delivers efficient demand planning accuracy.
In addition to leveraging your business’s historical data, applying trend analysis when forecasting demand is beneficial. This process helps you identify pattern shifts in customer behaviour and evaluate how this might impact your future sales. For instance, if you see that your business is receiving more orders through online channels, you can figure out there will be a rise in demand for products well-suited for online shipping.
Use The “What If” Scenario
It’s always better for every business to be prepared for the most troublesome situations in the market. Customer trends and unwanted market shifts can make or break any business. That’s why using what-if scenarios for forecasting predictions will always prepare you for the future
Fusing your business with Avercast’s Demand Planning Software delivers end-to-end technology-based supply chain solutions. Our agile demand planning accuracy solutions enable you to access accurate information so you can make better and improved predictions for your business. With 250+ algorithms, our dashboard empowers our customers to utilize highly intelligent decision-support tools. To know more about our brilliant solutions, call our experts or book a free demo.