Sales Forecasting Software or Demand Forecasting Software, What Is Right for You?
Many times we have many people asking do we do sales forecasting software and what is the difference between sales forecasting software and demand forecasting software. Too many companies often seem that the terms sales forecasting and demand forecasting are used interchangeably. However, at Intuendi we understand the difference and how vital the distinction is between sales forecasting and demand forecasting for your business.
So how do you know what software you need, is it sales forecasting software or demand forecasting software? We understand that maybe at first glance on a quick review sales forecasting software and demand forecasting software appear to be similar; their differences can mean significant disparity in forecast accuracy which dramatically impacts overall profitability resulting from overstock and outofstock scenarios for your business, which is never good.
So how does sales forecasting differ from demand forecasting, well it is not really down to the forecasting software or the mathematical algorithms, but rather in the actual data points used to calculate the sales forecast and the demand forecast. Simply put, an inventory replenishment system that is focused on a demand forecast or demand-driven forecast can and will reduce the risk of lost sales while improving service. This, in turn, delivers higher sales by connecting inventory levels with demand forecast.
Sales Forecasting is a measure of the market response; it is not a measure of market demand or sales demand. The problem with sales forecasting is that simple; the most accurate sales forecast is only a measure of market response to what you had available at that time. This is not a definitive forecast when considering the future market demand for your replenishment.
Issues with constrained supply, service levels, price and promotion are not analysed correctly in Sales Forecasting. This is why sales forecasting is responsible for out of stocks and overstocks so if your goal is to reduce out of stocks, overstocks and increase your sales, then your first action point should be starting using Intuendi Demand Forecasting Software.