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Forecasts Supply Chain

Do you have the right forecast to support your decisions?

Forecasts are relatively accurate for a longer time perspectives, for instance “total sales per year”. When it comes to individual SKUs and shorter demand periods, forecasts are frequently totally wrong; a complete guesswork. As a result, companies build up safety-stocks with the associated costs to meet fluctuating customer demands.

Many companies have invested in new internal tools and processes hoping they will improve demand forecasts accuracy. Very few use the opportunity to work with alternative practices, such as collecting actual data directly from their suppliers’ and customers’ systems, making forecasting decisions based on real demand.

Traditional forecasting is a good method for dimensioning production capacity and purchasing volumes for longer term perspectives. But if your goal is to increase the near-time service level to customers and reduce inventories, it is better to use actual demand information from your customers, such as point-of-sales data.

With access to your customers’ real sales information it is possible to create reliable short-term forecasts and use these as a basis for optimizing supply chain operations. There are a variety of techniques to achieve this forecasting transformation; the one you choose depends on the number of customers you serve. The resulting solution is typically not the same for 20 customers as it is with 5,000.

PipeChain has the in-depth experience and knowledge for implementing near-time forecasting solutions that are based on actual customer sales data and to find the right solution that suits your specific situation.

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