Key Aspects to Demand Forecasting and Demand Forecasting Software
Estimating future demand is one of the most valuable, but difficult challenges in supply chain optimization hence the growth of demand forecasting software. Any discussion of this subject will invariably note that forecasts are always wrong, but absolutely essential to planning business effectively.
Demand forecasting and with that demand forecasting software provides the crucial forward-looking picture that shapes how a company will deploy its supply chain to take maximum advantage of customer opportunity.
Demand planning and demand forecasting is the effort to increase forecast accuracy and customer service levels through better perceiving, predicting, and shaping the full range of factors that determine how well your product portfolio satisfies market needs.
No other aspect of supply chain optimization has more significant impact on business profitability. Providing the best one number forecast requires capturing demand close to its source and accurately predicting actual demand with enough lead time and confidence to ensure maximum sales and operations performance at minimum cost.
Do not forget… The demand plan is not a sales or marketing forecast, it’s not orders, and it’s not a budget either. It is a process by which organizations determine the most profitable mix of items that could be sold, balanced by constraints and demand risks. That is according to Gartner.
However, to win at demand forecasting, you really do need demand forecasting software… because you need to move on from simple demand forecasting.
Demand forecasting software applies science to deliver a better forecast (a prediction that turns out to be closer to actual demand). While demand forecasts have long been executed using not much more than a spreadsheet and a hunch, leading planning organizations strive for a multi-layered approach that employs a variety of statistical models in an unbiased way to comprehend the many factors that influence demand for products in the marketplace over time.
According to a recent Gartner survey on improving demand forecasting, respondents indicated that lack of accountability for the accuracy of the forecast was the biggest challenge.
A great way to move your demand forecasting forward is to use demand forecasting software like Intuendi.