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Accurate demand forecasting is essential for many businesses. If you can’t predict how much demand you’ll experience for your products and/or services, you’ll struggle to keep up with demand and may miss out on sales.
The following are five ways to improve demand forecasting at your company.
Stop relying solely on statistics
Statistics are important when it comes to demand forecasting. However, you shouldn’t only be relying on statistics. Statistical information can be a basic guideline to start your demand forecasting with. However, you’ll want to use other information regarding market intelligence, customer dating, and production hold-ups to increase the reliability and accuracy of your demand forecasting.
Understand that demand forecasting can never be perfect
No matter how much effort you put into demand forecasting, you will never be able to get things perfect. There is always some uncertainty that goes along with running and managing any type of business. The important thing is to be flexible and adaptable to surprises regarding demand. Develop strategies for handling differences between forecasted demand and demand figures that actually come up.
Consider surveying customers on future needs
A lot of companies overlook the possibility of asking customers directly about their future needs. Many customers will be eager to offer details of their future needs so that they know they can get your products and services when they need them.
Consider sending out surveys to regular customers with questions about any plans they have about future purchases or business with you.
Anticipate changes over time
Some companies make the mistake of expecting demand to be the same year over year. Companies change over time. Hopefully, growth at your company is going to lead to increased demand for your services. However, you can also expect to lose customers periodically so that demand will go down.
The goal is to grow demand for your products and/or services. Striving for growth means that demand will change. Wherever possible, you should anticipate changes by adjusting for developments that come along. If you sign on a new customer or develop a new partnership, make sure you put thought and analysis into how it’s going to affect demand at your company.
Make sure different departments are collaborating
Don’t make the mistake of viewing demand forecasting as solely being a function of supply chain functions. In fact, forecasting demand involves just about every department of your company.
For the highest possible level of accuracy and effectiveness when it comes to demand forecasting, various departments of your company need to be collaborating together. Sales, finance, manufacturing, marketing, and other departments need to work together and contribute data to demand forecasting efforts.
Consider how different departments of your company impact and are impacted by demand. This can give you some valuable insights that improve the accuracy of demand forecasting.
Demand forecasting is a key aspect of optimizing operations and maximising profits at your company. If you want to optimize operations, forecasting demand with a decent level of accuracy is very important. Use the tips mentioned above to improve demand forecasting at your company.