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    Should You Try & Improve Your Sales Forecast

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    Abhijit Bhandarkar
    The document discusses different strategies companies use to improve sales forecasting accuracy. It suggests classifying products by demand patterns and using different forecasting and replenishment approaches for each. The best strategy is to monitor current market information and react quickly to demand changes rather than relying solely on forecasts. Forecasts will never be 100% accurate so companies need flexibility in their supply chains.

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    Should You Try & Improve Your Sales Forecast

    Uploaded by

    Abhijit Bhandarkar
    21 views1 page
    The document discusses different strategies companies use to improve sales forecasting accuracy. It suggests classifying products by demand patterns and using different forecasting and replenishment approaches for each. The best strategy is to monitor current market information and react quickly to demand changes rather than relying solely on forecasts. Forecasts will never be 100% accurate so companies need flexibility in their supply chains.

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    3. Should you try & improve your Sales forecast

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    The document discusses different strategies companies use to improve sales forecasting accuracy. It suggests classifying products by demand patterns and using different forecasting and replenishment approaches for each. The best strategy is to monitor current market information and react quickly to demand changes rather than relying solely on forecasts. Forecasts will never be 100% accurate so companies need flexibility in their supply chains.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    21 views1 page

    Should You Try & Improve Your Sales Forecast

    Uploaded by

    Abhijit Bhandarkar
    The document discusses different strategies companies use to improve sales forecasting accuracy. It suggests classifying products by demand patterns and using different forecasting and replenishment approaches for each. The best strategy is to monitor current market information and react quickly to demand changes rather than relying solely on forecasts. Forecasts will never be 100% accurate so companies need flexibility in their supply chains.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    of 1

    Keur Knowledge Centre Article # 2019/03

    www.keur.in

    Should you try & improve Sales Forecast ?

    Many companies put in lot of efforts to try & find 4) Keep an eye on current “market
    ways of improving their sales forecasts – mainly information” to get early warning signals of
    through data collection & software to analyse past extraordinary increase or decrease in
    sales patterns & make future projections. demand. For normal fluctuations in demand
    However, forecast accuracy doesn’t reach desirable (say + or – 25%) don’t use any forecast, but
    levels. use a replenishment system that reacts very
    fast to changes in demand.
    Negative impact of forecast not matching actual
    demand is quite well known: Companies that use strategy 3) fare better than
    those using 1) or 2). To that extent, demand
    • Inventory mismatch (excess inventory of
    forecasting software that can analyse past data &
    some SKUs & stock out of some others)
    give some probable projections for future, helps.
    • Getting stuck with slow or non-moving
    inventory (low inventory turns). Cash &
    However, companies that use strategy 4) fare
    space blocked.
    considerably better than all others.
    • Risk of obsolescence, damage, theft & write
    Agile supply chains can be built by having different
    off
    strategies for SKUs with different sales patterns.
    • Lost sales opportunities due to stockouts
    • Cross shipments & chaotic working
    • Constant conflicts between sales, How should you proceed?
    production, procurement & logistics 1. Make a list of all your FG SKUs.
    departments 2. Classify them into different demand patterns
    such as – regular sales (fast moving),
    Companies usually use following strategies to try & container shipments, fixed monthly quantity
    align procurement , production & distribution with flexible delivery dates, fixed quantity on
    planning to sales- fixed delivery dates, spike sales, new product
    1) Use a sales forecast derived only from introductions.
    current “market information” without using 3. For each of these types, there is an optimum
    past data & patterns. solution & it requires a custom software to
    2) Use a sales forecast derived only from past plan & schedule, production & material
    data & patterns without using current procurement.
    “market information”
    3) Use a sales forecast derived from current Word of caution:
    “market information” + past data & patterns a) It is a myth that those who are “in the field”,
    “in touch with customer” or “in the market”
    can give accurate demand forecasts. Any
    forecast number has a probability of coming
    true. It is never a 100% guarantee. Hence,
    aligning production & procurement to a
    specific forecast number is always going to
    create problems for the company.
    b) Irrespective of demand patterns, there are
    always opportunities for sudden bulk sales. A
    company needs to set some rules of how to
    deal with these. Saying “yes” to every sales
    However, there is another strategy opportunity can be much more damaging
    possible, which is: than saying “no” to few cases, if required.

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