To efficiently balance your organization’s supply and demand you need a system in place to provide the most accurate forecasts possible.
Why this is important
Start to make decisions based on data; The most common forecasts will use past data to develop trends which can be extended to the future. The ERP system you have is full of past data, every transaction has been captured and these can be extracted and analyzed. Adding a system that will unlock this data and create forecast will fuel improved efficiency and supply chain balance.
3 Areas Forecasting can Improve Your Business
1. Customer Demand
What orders can you expect over time periods? You can forecast by customers, products or geography. You can show seasonality and compare sales data to predict which quotes will convert to orders and when that might happen.
2. Financial Forecasts
You can make a prediction of revenue and costs through forecasts and then use these figures as a budget. You can also predict capital requirements in the future based on current levels combined with future product demands. Financial forecasts are also essential when working on long-term projects with customers as costs will change and your initial quote should take this into account.
3. Supply Forecasts
You may have a stated lead time from your supplier, but you also have data on the elapsed time for delivery in the past. Combining this information will allow you to predict when materials will arrive. You could also look at shipping schedules, weather reports and union strikes to make the model more accurate.
In summary, adding a forecasting system can automate the sometimes tedious but critical activity of planning which can assist with seasonality, increasing inventory turn, decreasing costs, and improving the overall customer experience.
We are here to help.
Your organization’s ERP system has a significant amount of data to analyze but without a system in place to make use of this data you are missing out on major improvement opportunities. While no forecast will be perfect, with some effort, experience and with the help of good statistical software, one can get a lot closer than any guess.
We can help review your options and see if adding a forecasting system would make sense for your organization.
Contact Jarrett Meiers at 203.438.0161 or firstname.lastname@example.org