42% of supply chain leaders are struggling to balance profitability with sustainability, speed and innovation. Supply chain organizations can't afford to let supply chain disruptions limit impact. Transformational strategies to optimize end-to-end supply chain performance need vision, leadership and tenacity. They also need roadmaps, best practices and real-world examples to make the vision a reality.

• Demand forecasting

  Demand forecasting brings a wealth of benefits to retail businesses whose long-term health and continuity depends on accurate stock predictions. And the benefits aren’t limited to maintaining excellent customer service levels; they can drive improvements across multiple functions, bolstering business confidence and helping a firm realise its ambitions for growth. Below, we take a closer look at some of the benefits you could enjoy by embracing demand forecasting.

• Reduced Uncertainty

  Uncertainty is always a negative when it relates to supply chain management. It hampers decision-making, causes delays, and impacts stakeholder confidence. Demand forecasting can remedy uncertainty, ensuring that supply-related functions are adequately resourced, and that managers are better informed to make effective decisions that encourage growth and progress.

• Enhanced Supply Infrastructure

  Anticipating highs and lows in demand is essential for the health of your supply infrastructure. Demand forecasting supports enhanced supply chain management by optimising capacity, stock replenishment, and the streamlined management of warehouse personnel.

• Increased Revenue

  Understanding when products are likely to sell, and in what volumes, can lead to significant increases in revenue. Demand forecasting also means optimal product availability, so you never miss a sale.

• Reduced Need For Safety And Surplus Stock

  The more inventory in your warehouse, the slower the turnaround of stock and the greater the impact on your bottom line. Demand forecasting reduces the need for safety stock, so you can cut inventory costs while focusing on the most profitable products.

• Improved Fulfilment

  Better long-term customer advocacy – Demand forecasting means more of your products are available more of the time, which can be a huge boon from a customer advocacy perspective. Improving order fulfilment through accurate demand forecasting can encourage repeat customer and word-of-mouth recommendations, boosting your revenue and customer base.

• Importance Of Demand Forecasting In Supply Chain

  Demand forecasting is the estimate of expected customer demand based on historical sales data. Despite the dichotomy of factual input and intuitive approximations that come into play, demand forecasting software has made this volatile field more accurate with aggregate forecasts. The role of demand forecasting in supply chain management touches on strategic business planning. Demand forecasting also sets in motion the push processes of supply chain management such as raw material planning, purchasing, and logistics. It steers the pull processes including order management and distribution.

• Better Allocation Of Resources And Capacity Planning

  With a more accurate estimate of expected customer orders, organizations can source and acquire only the necessary raw materials. It also means that the production schedule will be more precise thanks to prudent capacity utilization and resource allocation.

• Streamlining Inventory

  A good demand forecast reduces the Bullwhip effect by providing more accurate figures for inventory throughout the supply chain. From raw materials to finished products, the organization will only carry stock that will move. This reduces the chance of overstocking or stockouts.

• Boost Customer Satisfaction

  Demand forecasting is especially important for assemble-to-order and made-to-stock business models. A happy customer is one who receives the products they have ordered on time. Demand forecasting enables shorter lead times and more efficient distribution.

• Plan Sales Strategies

  Demand forecasts create a starting point for other strategic planning activities within the business such as product design and management for new products and same family products. They also provide crucial data used to make decisions in purchasing, pricing, and promotion of current and new products.

• Better Supplier And Purchase Terms

  As mentioned before, demand forecasting guides the push processes such as raw material planning, purchasing, manufacturing, and inbound logistics. This means, for the purchasing managers, prompt purchase plans which can be shared with suppliers early. The result is better relationships with suppliers and leverage to negotiate better terms with suppliers.