Demand forecasting is a technique used to optimize inventory management by predicting what your sales will likely be for upcoming cycles during the year. Phase V’s data-driven inventory management system allows you to generate reports based on the past year’s sales. Demand forecasting helps inventory management plan for increased products in certain seasons (i.e., holidays) and plan for less demand during off-seasons or slower cycles. With this historical data, businesses can also plan for promotions or sales to boost sales in slower cycles and plan for sales events on products that have been in inventory for a long time or are out of season. Demand forecasting is significant to inventory management, as it affects all aspects of your supply chain.
Strategic planning attempts to save businesses money by planning for successful higher and lower demand cycles. Demand forecasting also provides an indicator for planning new product development, in addition to deciding how and when to launch new products and iterations of existing products. When using demand forecasting, you can plan for purchasing new products, as well as provide insights on pricing for new and existing products. Your current manufacturers or suppliers also benefit from demand forecasting, by giving those at the beginning of your supply chain more time and accuracy in acquiring raw materials to complete your projected orders, in addition to providing more time for manufacturers to produce your products. Early purchasing plans help situate you to negotiate better deals with your suppliers by building better relationships with them.
On the other end of your supply chain, demand forecasting offers more accuracy in order management and distribution. Streamlining your inventory so that you have enough products in your 3PL’s (third-party logistics) warehouse to meet your demand for varying cycles but not enough to incur extra storage fees helps boost customer satisfaction and avoids loss of customers and credibility due to stockouts and backorders. Demand forecasting can help you scale the amount of labor you need from cycle to cycle in processing your order fulfillment needs thus, improving labor costs, in addition to optimizing production schedules and lead times. More lead time for completed orders to reach their destinations also builds your brand base as your products consistently arrive on time and are accurately picked, packed, and shipped. Phase V’s inventory management technology gives users access to real-time data and improved transparency. With a 99.9% accuracy rating, Phase V can help implement your demand forecasting initiatives to improve efficiency in your supply chain and increase your sales, toward a better bottom line. Contact Phase V Fulfillment to discuss what can be implemented for your business.