Updated: Aug 18
The majority of today’s supply chain decisions are currently only reactive—reacting to the number of orders, the inventory levels, lead times, etc.
This is because most businesses resort to using sales forecasting, or other traditional and manual forecasting processes using Excel which are neither dynamic nor accurate. The long timelines and accuracy levels due to the manual nature and outdated nature of the traditional sales and demand forecasting process simply make no sense in today’s volatile and hyper competitive market.
Today’s customer expects their orders to be fulfilled faster than ever before, and faster than your competitors. This requires an agile supply chain, and also an efficient one, to make sure costs don't skyrocket in the process of fulfilling demand.
It is important to decipher changes in demand patterns as quickly as possible in order to make our supply chains more agile.
In the journey of making our supply chains more agile and proactive, businesses should start by implementing agile demand forecasting softwares that adopt AI and ML technologies to dynamically predict demand.
WHAT TO LOOK FOR IN A DEMAND FORECASTING SOFTWARE ?
Traditional demand forecasting methods will give you Aggregate forecasts which are not enough. A demand forecasting software like Crest can generate granular level forecasts for individual SKU at granular levels (Distributor, Retailer) on a daily/ weekly/ monthly basis with high accuracy which will help you fulfill demand and keep excess inventory at bay.
Real time demand sensing
A good demand forecasting tool will not solely rely on historical data alone. Since demand is dynamic, and various factors are involved that affect demand, an AI powered Demand Forecasting software can take inputs such as Lead Times, Seasonality, Trends, logistical disruptions, Promotions, Competitor activity etc. and constantly monitor them. This will allow businesses to accurately forecast demand based on real time demand signals and information from various events and adapt in volatile times and build a resilient supply chain.
Since there are a number of factors affecting demand, and demand forecasting as a process has many time consuming redundant processes, it is not very practical for businesses to spend hours trying to generate a demand forecast. This process will also be naturally prone to human bias and error.
To take the redundancies, guesswork and human error out of the equation, a smarter, efficient way would be to adopt Automated Demand Forecasting.
Without any manual intervention, Crest Demand Forecasting software dynamically predicts demand for all your inventory across any channel, taking into account real time market signals, trends, seasonality and stock availability to ensure you are always sufficiently stocked for any market volatility.
With a few simple clicks, you can automate your demand forecasting and inventory planning process and stay ahead of any market volatility, disruptions or trends.
BENEFITS OF DEMAND FORECASTING SOFTWARE ACROSS THE SUPPLY CHAIN
Since Demand Forecasting is such a crucial and foundational aspect of many Supply Chain decisions, an AI-powered Demand Forecasting tool can assist businesses in making accurate decisions in near real-time and can be widely adopted across the value chain. Accurate Demand Forecasting will always provide you with insights that you can use to further optimize various supply chain processes.
Granular Demand visibility will help businesses in taking decisions to better manage their inventory across Warehouses, Distribution Centers, and Retail Outlets. AI-powered Demand Forecasting softwares can calculate safety stock levels by analyzing past trends, market signals, and inventory levels.
2. Improve Order Fulfillment and save costs
The average cost to fulfill an order is 70% of the order value. During periods of unexpected demand, costs will increase if you are not prepared, leading to minimum margins and even losses for your business. Demand Forecasting tools like Crest will help you stay prepared for any changes in demand. Making use of technologies like AI, a good demand forecasting software will dynamically predict demand, and gives you insights beforehand, so that you can take decisions to change inventory levels for maximum profitability and minimum costs.
3. Lean Supply & Production
Accurate demand predictions generated by a demand forecasting software can assist you in prioritising and and rationalising your product line and lowering production costs. You will also be able to make better purchasing decisions with regards to raw materials or finished goods when you know exactly how much quantity to stock at the right time and location.
4. Optimize Promotions & Pricing
The insights gained from demand forecasts will assist you in optimizing your promotional activities and pricing models, as well as shaping demand. Having an accurate picture of future demand, will help you take decisions to run more promotional activities for particular products and markets. You can also be better informed while experimenting with different pricing strategies, when you know what product is more likely to sell more.