Optimize your to improve operations, minimize costs, and ensure customer satisfaction. Combining the right solutions and data will drive customer-centric strategies. Netstock’s advanced supply chain solutions will optimize your data, providing predictive intelligence and visibility to eliminate stock-outs, proactively plan for extended supplier lead times, and reduce excess stock.
It goes without saying that your customers are the heart of your business. Every step in your company's processes should contribute to your goal of retaining loyal customers. Delivering their products quickly and efficiently depends on optimizing your supply chain with accurate data and processes.
Suppliers must understand their requirements, preferences, and behavior to meet customers' demands. That understanding will inform your strategic choices regarding production, inventory, and distribution. Accurate demand forecasting will reduce stock-outs, excess stock, and unacceptably long lead times.
In this two-part post, we’ll explore the various approaches you can use to improve demand forecasting.
What is demand forecasting with Dynamics ERP?
Demand forecasting uses historical data, market trends, customer preferences, and other relevant factors to predict future demand for your products. Predictive planning based on data and analytics will accurately estimate the goods customers will likely purchase over time. Using the information, demand planners can estimate future sales and make strategic financial and capacity planning decisions.
Finding the best demand forecasting method for your business will ensure you make the right decisions to meet your goals and retain customers.
The importance of demand forecasting in supply chain planning with Microsoft Dynamics ERP
Demand forecasting will allow your company to make informed, data-driven production, inventory management, and resource allocation decisions. You’ll be better able to meet customer demand, remain competitive, and maximize profits. Benefits of accurate demand forecasting include:
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Reduced stock-outs
Demand forecasting can help you determine the optimum amount of inventory to maintain. With correct forecasting, you can avoid overstocking, which ties up capital and raises storage costs or stockouts, contributing to lost sales and customer frustration.
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Strategic production planning
Demand forecasting will enable you to plan efficient production schedules. When you understand the anticipated demand, you can adjust production levels, resource allocation, and procurement accordingly. Optimize your manufacturing processes, reduce long lead times, and avoid production bottlenecks.
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Better interaction with suppliers
Reliable demand forecasting enables supply chain stakeholders to collaborate and synchronize their activities. Your suppliers can align their production and delivery schedules with your anticipated demand. Improve coordination, shorten lead times, and enhance overall efficiency in the entire supply chain.
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Effective resource allocation
Demand forecasting will help you allocate resources more efficiently. You can appropriately allot workforce, machinery, and other resources according to future demand patterns. Prevent shortages and excess stock with optimum utilization of available resources.
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Improved financial planning
Accurate demand forecasts give you the information you need for effective financial planning and budgeting. You’ll be better able to estimate future sales revenue and align budgetary allocations accordingly. Set realistic targets, manage cash flow, and make informed decisions about investments, marketing strategies, and expansion plans.
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Increased customer satisfaction
Your company will see higher levels of customer satisfaction when you maintain adequate stock levels, minimize backorders, and fulfill customer orders promptly. This efficiency leads to improved customer satisfaction and increased customer loyalty.
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Appropriate risk management
Demand forecasting helps you identify potential risks or uncertainties in your supply chain. Your company should be able to anticipate market fluctuations, changing customer behavior, and other trends by analyzing demand patterns and relevant indicators. Develop contingency plans, mitigate risks, and respond proactively to market dynamics when you can predict what’s ahead.
Five trends impacting supply chains in 2023
External factors will influence and may disrupt supply chain planning. A global recession, inflation, supply chain interruptions, or material shortages may impede businesses from meeting demand. And a significant influence is the changing purchasing behaviors of consumers post-pandemic. Demand forecasters must work with real-time data, leverage predictive analytics, and collaborate with cross-functional teams to adapt their demand planning strategies effectively.
Here are five trends that will affect Dynamics ERP demand forecasting in 2023:
1. Shifting consumer values
Consumer buying behaviors have changed drastically. Society is becoming more digital, safety-conscious, value-driven, better informed, and environmentally aware. Demand planners must consider the increased need for online channels and optimize inventory levels accordingly.
2. Increased nearshoring or allyshoring
companies are wary of conducting business overseas or within less like-minded nations because of the risk of supply chain interruptions. This trend will likely continue, so you might need to review your current supplier network.
3. Advanced technology
The technology available can give you complete visibility of your supply chain operations. Now you can measure inventory levels, improve fill rates, and review safety stock levels and supplier performance. Increased visibility allows you to quickly identify and address potential stockouts or excess stock before they become problematic and interfere with meeting your customers’ demands.
4. Prioritized investment in predictive supply chain technology
Now you can use technology to model different sequences of events. You can measure the impact and profitability of these scenarios on your supply chain to inform your strategy.
5. Potential material shortages
It will be crucial to identify your high-demand stock items. You’ll want to source the materials required while developing a good relationship with suppliers old and new.
Find out more about demand forecasting in part 2
In this post, we’ve discussed the importance of demand forecasting and its benefits. We’ve also highlighted five trends that will undoubtedly affect your supply chain operations in the coming months and years.
In part two, we’ll continue with supply chain KPIs that inform demand forecasting and techniques for optimizing your supply chain demand forecasting.
How Netstock’s Pivot Forecasting can help you optimize demand forecasting
Netstock’s is a powerful tool for empowering demand planners to quickly adapt their forecasting models to keep pace with evolving market dynamics and shifting customer behavior. Pivot Forecasting will give you a granular view of demand at various levels, including individual SKUs, regions, and channels. Forecast at any group level and in base units, price, cost, or margin. See beyond the surface to extenuating issues such as seasonality, promotions, and events. You’ll be empowered to make better-informed, strategic decisions.
We’ll talk more about Pivot Forecasting in part two. But if we’ve piqued your interest, our experts at Netstock, and let’s talk about how Pivot Forecasting can help you optimize demand forecasting for your supply chain.
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