Demand Forecasting for fast-changing markets
Enterprises today operate in an environment where competition increases continuously and achieving a high level of customer loyalty is harder than ever. That’s because customers drive market dynamics more than in the past and being powered by a strong demand responsiveness is the new basis of competition. Companies spend time and money on marketing strategies and advertisement in order to enlarge their customer base by attracting new ones. As a consequence, losing customers has a dramatic impact on the cost to business and this makes the customers retention one of the most important and profitable activity every company should focus on.
Customer satisfaction is one of the priorities in this consumer-driven scenario, but it’s not the only one.
Demand managers and decision makers have to operate in order to daily run the business through feasible and profitable paths; sales operations staff have to understand the true dynamics with reliable demand forecasting processes in order to confirm the expected revenue and meet the metrics they have to cope with.
The demand volatility has a huge effect on the company for many aspects related to the production cycle, the inventory levels and costs, and the workforce optimization. Depending on the business cycle approach, surprising changes in demand could result in unexpected changes to the quantity of output and employment in the short run. On the other hand, unexpected price changes in a competitive market can in turn amplify the effect of previously unplanned quantity changes, at least in the short run.
A modern statistical demand forecasting software can analyze the demand signal coming from users data and industry trends and help businesses to lower operational costs, increase product availability and improve profitability with a more effective supply chain management. There are many benefits in using automated solution for demand forecasting: first of all, reducing the effort typically required by manual tasks results in an increased frequency of the forecasting activity and a way better usage of the employees’ working time. Sometimes, with thousands of products, materials and several sales channels, manual forecasting is definitely impractical: this is the worst way to operate when dealing with markets that change day-by-day.
The most advanced demand forecasting tools, like intuendi.com, are powered by state-of-the-art algorithms that can achieve an accuracy far better than common spreadsheets-based approaches: this results in accurate stock levels, improved lead time analysis, effective replenishment strategies. In a few words, smart tools that help companies to avoid unnecessary costs, invest unexpected capitals in more profitable activities and boost their businesses.
Originally published at www.intuendi.com on June 28, 2017.