Accurate Demand Forecasting allows you to deliver the highest service levels to your customers whilst keeping stock to the absolute minimum. Using Stock control systems include Demand Forecasting capabilities which perform the heavy number crunching but are self maintaining, leaving buyers free to focus on the finer details. Look for:
Adaptive smoothing – for creating the base demand forecast. Instead of forcing you to choose between weighted average methods for each product, this provides one single self-adjusting algorithm which sets the optimum smoothing. This allows the forecast to react quickly to sales trends, but not over-react to random fluctuations in demand. The re-order algorithm should take into account lead time, safety stock and re-order interval to avoid the need to maintain minimum and maximum stock levels.
Demand Profiling – to modify or replace the base forecast for a period to include anticipated variations in demand caused by seasonality, promotions, product launches or events. During the World Cup, for example, you could profile beer categories to uplift forecasts while England performs well or to downscale forecasts if they exit the competition. Profiling should be flexible enough to work by supplier, product, product group, or customer contract, but to accommodate exceptions.
Daily profiling – for items delivered more than once a week – so orders can be weighted to reflect daily demand pattern during the week. This is particularly important for chilled and fresh produce with a short shelf life.
Exception management – to detect discrepancies between forecast and actual demand and modify future forecasts where necessary.