Demand forecasting is a smart and innovative way to predict customer’s buying habits in the future. It is a process through which you can tell the products that will have more demand in the future and time for the increased demand. Through proper forecasting of the potential product demand, you will be able to make smart decisions that will see you manage and grow your business more efficiently. It is an error-prone and technical understanding that requires a high level of prowess and experience. Let’s discuss the smartest practices for forecasting the future demand for certain products and services.
Make It A Repeated Exercise
The accuracy of any forecasting exercise depends on the consistency and efficiency. Conducting the exercise twice a month provides is highly recommended since it helps increase accuracy and efficiency. Doing it monthly or so places you in a better position to assess your failures and successes so that you initiate more efficient techniques that would guarantee minimal to no errors.
Combine Data from Different Sales Channels
If your sales come from a multitude of channels, you are highly advised to combine the data from each of these channels when making your forecasting. By so doing, you will have a clearer picture of the channels that are giving you a higher return on investment on each product, the shipping costs, and order demands. With this information, it will be easier to make smarter predictions and planning.
Keep the Data Updated and Present
Without accurate data, you can only assume how the demand for certain products will be in the future. Demand forecasting is impossible in the absence of accurate and updated access to business data. For you to make smart and effective forecast decisions, you should have access to updated finished goods, inventory, sales, and raw materials data otherwise you will be making wrong assumptions. Your data should be accurate and real-time for you to calculate demand. You may need to have a good cloud-based inventory management tool like https://halobi.com/products/halo-platform/forecasting/ for you to efficiently track inventory, POS, and financial data.
Make the Forecasts Accurate At All Levels
Statistics show that less than 20% of businesses forecast demand from the customer, location, and SKU planning phase. Most businesses forecast from the level of customer purchase and purchase frequencies. It is impossible to attain your expected business goals if you don’t forecast from the level of customer buying habits and sales. It is usually recommended that you forecast the potential demand from the sales and operations planning. By so doing, you will be in a better position to identify errors and their core sources which helps in enhancing the process.
These are some of the best demand forecasting practices to implement for result-oriented planning of your future business sales and planning. These aren’t trial-and-error practices. They are time-proven techniques that are proven to work efficiently and accurately if properly implemented. For better and smart forecasts, you may need to employ the use of high-end and reliable forecasting software like Halobi. You can talk to our team to know more about our products and services by clicking here.