One of the most undervalued strategies for increasing profit is demand forecasting. Accurate forecasting will benefit your business in many ways that will ultimately increase your bottom line. With sales forecasting, you prepare for more than just your current period, and you use a detailed analysis of the market to determine the timing of sales. Learn why demand forecasting is so important for your business and the best forecasting tools that make forecasting a breeze.
Improve Supply Chain Efficiency
Forecasting is part of your operations management that helps improve your supply chain. Useful forecasting assesses the number of sales and timing of sales which helps you schedule all aspects of your supply chain, including production, warehousing, and shipping. You can predict drastic increases in demand and plan accordingly to ensure you have enough materials to handle production.
Marketing and promotions are important at all times, even when sales are slow. Considering demand will help you better plan marketing strategies. Using sales forecasting, you can estimate your revenue for different points during the year. During slow periods, you can opt for cost-effective, guerilla marketing. During the times when sales and cash are high, you can implement more targeted, but expensive, marketing tactics.
Accurate demand forecasting is a precursor for accurate budgeting. Using the information from sales forecasting, you should create a master budget as well as budgets for overhead, cash flow, manufacturing, labor, and marketing. If you are able to create a flexible budget, you can shift certain efforts based on slow or busy periods.
Use forecasting to determine staffing needs at different points in the year. Increase or decrease staff according to demand. Knowing this ahead of time allows you to bring on any additional or seasonal employees early enough to have them trained and ready to help during the busy times. When you know the demand, you can determine when it is profitable to add another shift or expand production capacity. Demand forecasting allows you to forecast your staffing needs, create a better organization chart, and hire proactively.
Assess Overall Performance
Tracking overall performance is crucial for improving your business. With sales forecasting, you can compare the actual sales to the expected sales. Determine how big of a gap there is between your forecasted demand and your actual demand, and adjust your business model accordingly. Demand forecasting helps with overall planning and tracking of your business performance.
While forecasting is definitely important for your business, it is just as important that the forecasting is accurate and efficient. Forecasting software is the best forecasting tool for demand forecasting. Inventory Mirror is a reliable warehouse management service that offers forecasting software with its Inventory Forecasting feature. Inventory Mirror uses your previous sales data and trends to help you determine how much inventory to order for a certain time period from your vendors. Using this powerful forecasting software, you can ensure you order the correct quantities and are never overstocked or understocked. Easily and accurately determine your inventory needs with demand forecasting from Inventory Mirror. Learn more about the Inventory Forecasting feature and how to use it with a helpful video guide HERE. Discover how the #1 warehouse management solution, Inventory Mirror, will help you with your forecasting by visiting our website.