Accurate forecasting is the basis of effective inventory management. Yet for many organisations, forecasting is a complex undertaking which is often prone to error. The problem for many businesses is that a reliable forecast must take into account a whole host of different factors as well as data from across the business. Even determining the most appropriate forecasting methodology in the first place can be a difficult decision, let alone identifying why a forecast is inaccurate and then taking the right steps to rectify the issue.
With this in mind, what can supply chain teams do to improve the way they go about forecasting? How can demand planners account for the influence on product lifecycle, seasonality, and emerging trends of future? How can businesses reduce the margin of forecasting error to get a more accurate picture or future demand?
As part of our “building blocks to a better supply chain” series, we have put together a simple 6 step guide to help you significantly increase the quality your forecasts. Put together by Slimstock’s inventory & forecasting expert, Steven Pauly, this guide is designed to help you overcome the following challenges:
- Choosing the right forecast procedure
- Choosing the right forecast procedure
- Identifying the cause of forecast error
- Account for evolving Product lifecycles
- Taming the bullwhip effect
- Maintaining a responsive forecast