Demand Forecasting: Meet Your Customer's Requirements
A wrong demand signal will cascade throughout your supply chain causing significant and costly issues to supply chain excellence. Demand forecasting is the cornerstone of effective supply chain management. This process empowers businesses to make informed decisions regarding production levels, inventory management, and distribution strategies, all of which are essential for enhancing operational efficiency and cost-effectiveness.
As a Data or Supply Chain leader, you already understand the pivotal role these aspects play in your organization’s success. Forecast accuracy is the yardstick by which we measure the reliability of these predictions. It allows organizations to assess how closely their forecasts align with actual outcomes. By honing in on forecast accuracy, businesses can fine-tune their strategies, optimize inventory levels, and, most importantly, enhance customer satisfaction.
Supply Chain Excellence Through Analytics
Our work on the Demand Forecast Report involved close collaboration with our client’s Global Demand Center of Excellence (CoE) to understand the demand forecasting process. We identified two distinct processes: Customer Demand and Affiliate Demand, similar to our DIFOT/SIFOT Project.
o efficiently manage the extensive and intricate demand forecasting dataset, we closely collaborated with our client’s IT team. Together, we addressed the complexities of data extraction, transformation, and loading into an OLAP data cube, following the CRISP-DM methodology. This approach allowed us to swiftly deliver an initial report section, ensuring timely access to critical insights and consistent executive support throughout the project’s development.
Transitioning to the Forecast Accuracy Report, our productive partnership with the client began with creating a Power BI prototype. Through iterative refinement and close collaboration, we aligned the prototype with our client’s expectations. Once this alignment was achieved, our collaboration extended to their IT team. Together, we constructed an OLAP cube, streamlining data integration with Power BI. This efficient process facilitated a seamless connection between the OLAP cube and Power BI, enhancing data access and reporting capabilities.
As a result of our collaboration, our client now possesses a robust data-driven decision-making toolkit, positioning them for success in today’s ever-evolving business landscape.
Delivering Real Results
As a result of this data project and our increase transparency into demand forecasting, demand performance improved over a multi-year period.
An inventory simulation ran by SupChains showed that a 1% improvement in forecast accuracy reduces inventory by 0.4% and a 0.6% reduction in shortages. Your Supply Chain’s success begins with Demand Forecasting. Having better visibility and conversations allowed our client to have better conversations internally and externally. This created an aligned forecast that allowed the supply chain to run more efficiently. The end result? A vast improvement to the customer experience, better inventory management, and production scheduling.