Business decisions always come with a lot of risk. There is never an assurance where decisions CEOs make for their respective companies will translate to success. Demand planning and forecast can help predict the chances of success of business decisions you make for your company. Let’s briefly narrow the topic of demand forecasting for this article.
Firstly, for our purposes, demand planning and forecasting is a vital process for anticipating the demand of a product based on uncontrolled variables such as competition. Secondly, demand forecasting is always targeted towards future time periods such as next month, within a year or for the next ten years. Lastly, we refer to the quantifiable demand forecasting which uses statistics (and software and apps) for more accurate forecast.
The Effects of Demand Planning and Forecast
A lot of businesses rely on demand planning and forecast for their operations. They look at all these forecast and planning reports to lessen the risks they take out of their decisions. There are even some companies who assemble teams who work exclusively on demand planning and forecast aside from their regular employees.
In our company, we provide demand planning and forecast services for our clients to support the products they launch and continue to manufacture. We make sure the objectives are modified according to the outcome of our demand analysis and forecasting. For example, if our client is planning to manufacture 100,000 units of their latest product but the forecast suggests demand is low for the product. We will ask our client to modify the numbers and only manufacture 30,000 to 50,000 units to avoid potential loss.
Demand planning and forecast do not only impact the manufacturing process but also play a huge role to cost estimation and other financial aspects of an organization. The demand forecasting process can also be a factor to employment and workforce within the company. If the demand forecast suggests a very high number, then the company should automatically adjust to make sure they can comply to the demand, and they have enough employees for the huge workload for their upcoming product. They do not really have to hire additional employees full-time but only for a project basis.
Here is a great guide for demand forecasting in the post-pandemic era.
Advantages of Demand Forecasting
Demand forecasting allows you to estimate future purchases. Despite this need, many small firms often believe there is no necessity for them to do product demand forecasting. Our quantitative demand forecasting manufacturing services are made for you to find out exactly how much you will need to buy.
With product demand forecasting only being an estimate, it should be used to guide the supply chain and business management departments in your custom manufacturing company. Demand analysis and forecasting is a tool that offers accurate guidelines for any production line. Given that, we always provide a range of different scenarios in the event that you have unforeseen changes in purchases.
- Predict the Future: You need to know what your clients will buy in 3 or 6 months. Unlike simple estimations, our demand analysis and forecasting technique integrate factors other than inventory and sales. We review client specific information to see how their habits change over time.
- Secure Your Demand: You need demand analysis and forecasting in the supply chain so that you can secure production lines at the factory. Out of stock time occurs whenever people misunderstand the production schedule of the supplier. Many purchasers don’t realize factories can get full too.
- Increase Your Potential: Our experts run demand analysis and forecasting tools so that you are prepared as best as possible for any scenario. To put it another way, we make sure you can make the best choices for your company so that you can maximize your profit.
Demand Planning and Forecasting
Why it Matters
In general, both large and small companies encounter the same product forecasting problems. The first thing to remember is that all companies have to consider their throughput time which is often not fully known by them. Inventory changes are large specifically during holiday seasons. With this in mind, a simple forecasting estimate will always underestimate the high season and overestimate the low season. Order changes will take too long.
For this reason, we believe successful product demand analysis and forecasting in the supply chain should consider three main aspects. Your estimated throughput time, the likelihood of you running out of stock and changes from season to season. Firstly, knowing how fast you sell things can give you a good estimate of the required production lead time and how to decrease throughput time. Secondly, checking the probability of not having stock lets you develop order schedules. Thirdly, knowing how holidays and other seasons affect your sales is important.
You can also check out this great read regarding demand forecasting and analysis.
Want to Combine Services?
You should take advantage of our demand forecasting service during the project development phase. At the same time, it can also be used for an ongoing project. It is part of our Manufacturing Analytics Package and the full package allows you to consider costing, a streamlined production and expected retail demand forecasting at the same time.
Each project requires customized attention. You can choose standard packages or go for a personal-driven solution. Make the best combination for your success and we will deliver it to you with great care!
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