No one has to tell you about the losses possible from poor inventory planning and control. Managers dread customer calls describing the scenario of not having enough products on-hand to meet the demand for a special they are running. However, proper demand planning as part of your resource planning system can predict consumer habits so inventory levels are kept at an optimum. These five steps will help improve forecasting and demand management.
5 Techniques to Maximize Results
Include Customers in Inventory Analysis
Your clients can be key to reducing forecast errors and they can provide you with a more consistent and accurate demand model. Ideally, monthly or weekly input from clients will ensure you have what is necessary for them when they need it and who knows best what products are needed?
Include Suppliers in the Inventory Analysis
Manufacturers and suppliers can often provide extra information and insights about product availability. They can also provide data on new products.
Applying Demand Sensing and Shaping Strategies
Take a new approach for sensing changes in demands for products. This holistic viewpoint groups items into segments which have common or similar demand requirements. Shaping processes often influence downstream product chain activities. These forecasting and demand management strategies help to balance out stock and achieve the best return on investment, or ROI.
Frequently Measuring and Performing Quality Reviews
You can change demand algorithms once they are in place. The constant flow of activities will have an influence on results. It’s imperative to review and compare demand predictors routinely against reality. This allows you to fine-tune your processes accordingly.
Keep a Watch on External Influencing Factors
External factors can influence forecasting and demand management efforts. Consider factors such as economic changes, availability of raw materials, and other influencing factors.
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