Nobody can predict the future, but thanks to some powerful software and the use of accurate automatic data capture technology, most companies can generate a pretty good idea of what their sales and inventory will look like in the days, weeks, and months ahead. With predictive sales forecasting, it’s possible to reduce excess inventories while also improving sales and streamlining supply chain operations.
Forecasting isn’t perfect, particularly the farther into the future you project, but it can help ensure that you have enough inventory in the supply chain to satisfy demand, but without increasing obsolescence or losses. Forecasting can help you avoid overestimated demand that leads to bloated inventory and high costs and underestimating demand that means customers won’t get the products they want.
Companies can generate better forecasts by using mobile computers and specialized software to collect and analyze data on sales, returns, stales, specific customer order histories, promotions, seasonal fluctuations, and other factors.
For companies that specialize in route delivery — particularly for direct store delivery applications where perishable goods may be involved — there are clear benefits for being able to let customers know their optimal inventory levels.
With historical data, companies can also predict times when there may be large swings in demand that would require more or less inventory. In turn, that can help avoid costly overstocks or out of stock situations that result in lost sales for both the supplier and the customer.
Doing so can help minimize stales or returns on a weekly basis. This, by itself, can justify implementation of more robust mobile route management systems. Tying historical information to today’s detail stock position can provide much better dynamic planning.
For example, companies using mobile computers, barcode scanning, and a product like the Quest Route Edge solution for field applications can use data gathered at the customer location to create these forecasts. Route Edge can eliminate errors in the field to help better manage inventory, returns, deliveries, and orders. Using customer information and sales history, the solution can help minimize returns and out of stocks by ensuring that companies provide the right level of products in the right amounts.
This predictive sales forecasting can improve sales and operations planning, and help various departments (sales, operations, planning, manufacturing, finance, etc.) work from a unified forecast. This helps increase revenue opportunities and reduces inefficiency.
This can result in a number of critical benefits in the supply chain.
- Predictive sales forecasting can reduce risk by providing more accurate scenario planning. With forecasting software and data from the field, a company could predict the impact of a weather event or a new promotion on sales.
- By identifying the factors that affect sales fluctuations, companies can do a better job of identifying customer needs and getting ahead of these spikes or dips in demand.
- Marketers can greatly benefit from predictive sales forecasting. They can see the impact of a marketing campaign and use that to design better promotions, or identify specific time periods when a promotion might be most effective. Price optimization is another benefit, since companies can better gauge when discounting can be used to reduce inventories without damaging their margins.
- Predictive sales forecasting can also help improve the way companies approach product lifecycle management, because they can use historical data to identify when demand is likely to drop off.
Accurate forecasting reduces risk in the supply chain and helps keep inventories optimized for both you and your customers. By leveraging your delivery drivers and field force to gather accurate inventory data at customer sites, you can generate more accurate forecast — and reap the benefits of higher sales and reduced obsolescence.