Sales and inventory demand forecasting are critical to the longevity of any business. Although there’s no crystal ball to predict future trends with 100% certainty, smart demand forecasting is the closest thing to it – and it’s how the most successful B2C and B2B businesses make data informed decisions about the future.
Here, we look at how demand management and forecasting help overcome some of the most common supply chain management challenges.
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With the rise of eCommerce and rapidly changing markets in recent years, traditional businesses that had previously mastered the art of supply chain management have had to rethink their entire approach. Supply chain management has been challenged by four key market forces:
Failure to recognize and account for these forces can lead to inefficiencies in the supply chain, which has far-reaching consequences: over- or under-stocked inventory, bloated inventory holding costs, dissatisfied customers, lost sales, and congested distribution networks – just to name a few.
Demand forecasting is a key element in planning a supply chain strategy, and in turn determining the agility and responsiveness of a business to fluctuating demand. With demand volatility at an all-time high, there is no ongoing ‘standard’ for most businesses – which is why demand planning and inventory optimisation are a necessity.
Creating a systematic process for demand forecasting helps businesses to do the following:
All of the above contribute to a more efficient supply chain, increased sales and profitability, and improved customer satisfaction.
From reducing costs to keeping consumers happy, demand forecasting is an essential element of supply chain management, helping companies fill orders on time, avoid unnecessary inventory expenses and plan for price fluctuations.
Traditionally, however, accurate demand forecasting has been easier said than done. Extensive product ranges, multiple sales channels, and external factors like seasonality have made it difficult for businesses to get an accurate picture of future growth without constantly updating spreadsheets and trawling through volumes of historical data.
The good news is that real-time automated demand forecasting is available to businesses of all sizes thanks to intelligent order management systems. TradeGecko’s demand forecasting functionality, for example, uses key sales and inventory data to identify patterns and pull out insights about future demand by product, variant, warehouse location, etc.
The system also triggers automated inventory alerts with recommended reorder quantities based on automatically forecasted sales demand. That means you can access demand forecasts and reap all of the benefits mentioned earlier without needing to do any of the legwork. The future is now, and it looks promising for growing businesses!
Sign up for a free trial of TradeGecko today and start experiencing the power of demand forecasting!