Demand Forecasting
Demand forecasting is the process of determining what products are needed – where, when, and in what quantities. It forms the basis for all strategic and planning decisions in a supply chain and is, therefore, critical. Needless to mention, it influences every functional area of the organization – be it marketing, production, distribution, finance or personnel!
Planning accurately made easy!
At Research2Systems, we understand that when it comes to the supply chain planning process of any organization, demand forecasting serves as a crucial link. The manufacturing and distribution activities need a definite lead time for making products available at the consumption points, and demand forecasting enables this by providing an indication of the future requirements.
It is extremely critical to get near accurate demand forecasts – as forecasting inaccuracies would lead to a host of challenges like stock outs, sub-optimal distribution, high inventory costs, obsolescence, re prioritization of production, etc. Lack of accurate demand forecasting adversely affects the two key metrics of any supply chain – service levels and supply chain costs.
Key Challenges Faced By The Contemporary Organizations In Forecasting
Every product manufacturer will have a range of SKUs in its portfolio to address the needs of a diverse set of customers. Each SKU would have its own demand characteristic – some would be fast moving, while others would be slow. Some would have very stable demand, while others would display high demand fluctuation. There would be factors like seasonality and dependency on other products that could affect demand.
As new SKUs get introduced, supply chain managers have the additional challenge of determining how much to produce in the introduction phase, what cannibalization effect this would have on the related products, etc. Similar would be the case for items on promotion.
Even at a tactical level, there are quite a few questions that need to be addressed while forecasting demand:
- What time horizon to forecast for?
- What would be the frequency to forecast – Daily, Weekly, Monthly, or any other?
- What forecasting strategy to adopt – Top Down or Bottom up?
- What level of product hierarchy to forecast at – SKU or Product family?
- Which historical data set to consider – Orders or Shipments?
- Which departments are to be involved in the demand forecasting process?
Organizations typically lack the ability to manage this crucial link in the supply chain planning process leading to the challenges mentioned above and, therefore, lose out to competitors on service levels and operating efficiency.
Research2System’ Demand Forecasting Solutions – What makes us different!
We, at Research2Systems, understand the criticality of accurate demand forecasting and appreciate that there is one method for demand forecasting that fits all scenarios. We have developed advanced demand forecasting solutions that cover all possible supply chain scenarios and product characteristics.
To help businesses make the most of their supply chain processes, we offer a host of forecasting techniques:
- Moving Average
- Series of Holt-Winter models
- Intermittent Data
- Promotion Forecasting
- Curve fitting for straight line, quadratic, and exponential
Research2Systems Demand Forecasting – Great Features. Great Results.
When it comes to the forecasting solutions offered by Research2Systems, we strive to provide all our clients the most advantageous set of features, consisting of the following:
- Expert selection takes the guesswork out of forecasting
- Fully parameterized forecasting models
- ‘Tournament’ automatically selects the best-fit model and optimizes parameters
- Number of forecast error measures
- Automatic identification of outliers
- Calculation of safety stock
- Standardized set of diagnostic tool to help you compare and evaluate models
- Various statistics like MSE, MAPE, MAD and tracking signal allow you to quickly evaluate different models
- Exception messages give signals if forecasting is not performing up to the mark or the model selection is not appropriate
Experience the Research2Systems Advantages!
The entire suite of Demand Forecasting solutions offered by Research2Systems, aims to bring numerous advantages for our clients. So, when you rely on us for your business’s forecasting requirements, we will make sure that you experience –
- Simplified forecasting process
- Improved planning
- Decreased stock outs
- Easy data access to the end user(s)
- Enable all users to interact with each other
- Capability of forecasting with different models
Contact us today and know about our Demand Forecasting solutions in detail.
