Increase your forecast accuracy and efficiency!

Challenges in demand forecasting

Most manufacturing companies rely on demand forecasts to control purchasing, production, inventories, and capacity. This means that forecast accuracy has a huge impact on both the efficiency of operations as well as the service level towards customers. Consequently, a lot of manufacturers have taken steps to increase their forecast accuracy. In many cases this has meant multiplying the time and resources dedicated to forecasting – more time is spent on each individual forecast, forecasts are updated more frequently, forecasting is done on a more detailed level, and the forecasting horizon has become longer than before.

Yet, with the support of quantitative forecasting tools, forecasting can be made both more efficient and more accurate. This is especially true when there are several hundreds of items to be managed and several customers or regions for which forecasts are needed. Quantitative forecasting is particularly well-suited to recurring situations, such as seasons or promotions, or on-going trends. Quantitative forecasting methods are also able to adapt to changes in demand patterns – they can, for example, automatically take into account an increase or decrease in the baseline sales of a seasonal product or the dampening of a trend in the demand.

In a changing business environment, qualitative forecasting is also needed. Expert judgment is especially important when producing forecasts for completely new products, new kinds of promotions, or when major changes in the market or the competitive landscape take place. Qualitative forecasting can be made more accurate and efficient through easy-to-use forecasting tools that offer all the information relevant to decision-making in the form of graphs and reports.

Finally, an important challenge for many manufacturers is to motivate its sales organization to participate in forecasting. One way of attaining this goal is to emphasize the connection between forecasting and sales planning by combining forecasts, sales targets, budget data, and other sales planning information into the same tool.

RELEX helps manufacturers increase forecasting accuracy and efficiency!

With the aid of RELEX’s software tools, our customers have managed to significantly improve the accuracy and efficiency of forecasting. Among other things, our customers have managed to:

• Move from forecasting on the retail group level to more detailed forecasting on the retail chain level, without increasing forecasting resources,
• Produce more accurate forecasts using quantitative forecasting models than before when expert judgment was used,
• Increase their forecast accuracy in challenging situations, such as during major seasons,
• Attain a month-level forecast error of less than 10 % and a week-level forecast error of less than 15 % using quantitative forecasting without manual corrections.

The RELEX Forecaster software provides excellent support for both quantitative and qualitative forecasting.

Read more about the RELEX Forecaster software on RELEX’s products site or request a presentation on how RELEX Processor benefits manufacturers.
If you are a manufacturer interested in developing your forecasting process but lacking information on the attainable benefits and required investments, the RELEX X-Ray analysis is for you.
Read more about the RELEX X-Ray analysis on RELEX’s services site or request a presentation on what RELEX X-Ray offers to manufacturers.