Business Automation and Software Blog

Demand Forecasting in Supply Chain Management 2023

Posted by Robert Baran on Wed, Jun 07, 2023 @ 11:00 AM

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Demand forecasting is a crucial component of a distributor's supply chain strategy. Without it, there is no system to determine how to purchase inventory to fill orders in the changing economic conditions present in 2023. Demand forecasting in supply chain management must consider several factors, including the WHO recently announcing the end of the global pandemic. 

Distribution companies will no doubt rely more on technology for the rest of 2023 and beyond. Interacting with suppliers and vendors digitally will become routine for most interactions. 

Forecasting Demand in Supply Chain Management

Demand forecasting is the process of predicting the quantity of goods consumers will purchase in the future. Predictive analytics estimate informed decisions about supply chain operations, cash flow, warehouse capacity, etc. Historical data is often used to predict sales and revenue for the same period in the future. 

Other factors that impact demand forecasting include:

  • Seasonality

Certain goods are known as seasonal: Outdoor toys, paddles, boating, and kayaking gear are associated with the summer months (at least in northern climates). Plants, shrubs, gardening accessories, and seeds are spring purchases. Fall is the time for pumpkins, Thanksgiving crafts, turkeys, Halloween costumes, and candies. Winter means the Holiday Season: Various types of decorations and holiday greeting cards, sweets, and gift wrap. During other times of the year, sales of these items are slower. 

  • Shelf Life

Forecasting the demand for perishable goods must be very precise. Otherwise, a lot of inventory could be recovered. Demand can be predicted to a certain extent if customers subscribe to a box service where they receive products simultaneously every month. 

  • Location

It's crucial to make intelligent choices when choosing geographic locations in your supply chain. Consider regional suppliers to keep shipping costs to your warehouse down when placing product orders. However, it also makes sense to be strategic about your demand forecasting in the supply chain. If you sell a lot of ski equipment to Washington State customers, renting warehouse space there makes sense. Customers will get their orders more quickly than if the order is shipped from New Jersey.

SYSPRO ERP Is the Right Software for Demand Forecasting

PositiveVision assists clients in finding ways to do business more efficiently to increase revenue. As pointed out above, predictive analytics are used to make decisions in several company areas.

  • SYSPRO Cashflow Forecasting makes projecting cash flow requirements easy. The software allows users to create multiple cash flow models using various data, including sales and demand forecasts. Users can also define their own projections by date ranges.
  • Analytics gives users quick access to the information needed to make decisions quickly, including those about demand forecasting in the supply chain. This solution is scalable and customizable to meet a company's specific requirements. The Analytics function gives users access to historical data to analyze trends. The SYSPRO ERP is simple to install and configure. It also allows you to track changes in customer activity, which is a crucial part of demand forecasting. Your team will want to be proactive about measuring any changes that may impact the orders being placed. 
  • Sales Analysis provides insight into company sales activities to provide valuable information on sales forecasting and planning. The Sales Analysis feature lets users identify the most profitable products and divisions. It also assists with analyzing market trends, geographic buying patterns, and sales forecasting. 

PositiveVision Is Your Expert on Demand Forecasting in Supply Chain Management

PositiveVision has proudly served distribution companies in Greater Chicago for over 30 years. We focus on each customer's needs to identify their issues and how they want ERP software to solve them. Our experts guide you through decision-making to help you make an informed choice. We know that managing cash flow is part of demand forecasting in supply chain management and would like to invite you to click here to watch a helpful webinar that addresses this topic. It addresses how to eliminate the hidden costs that are shrinking your profits. Contact us to speak to one of our product experts about a customized software solution for your business.

Topics: demand forecasting in supply chain