Demand Forecasting
One of the key business principles of managing an effective supply chain is to always start with customer demand. This should drive many of the decisions to be made regarding how much, when and where to source stock to meet the demand on time (or better), and in full to meet the Customers needs.To achieve this there is a compelling need to be able to accurately forecast customer demand. Working back the business logic further, there needs to be a demand history in which there is sufficient confidence to forecast the future demand from. Relying on the salesman’s forecast is not good enough or using statistical techniques based on exponential smoothing both run the risk of overstating demand and therefore overstocking. Relying on raw sales history to create a forecast will not do either as this will include one off exceptional demand, promotions, alternate products, product introductions and many other external real world events that skew what should have been the ‘normal’ demand.
Only human, professional knowledge and expertise recognise and deal with these problems. However, the Lakeview software product suite including this Demand Forecasting module, can provide the Supply Chain professional with the tools and information to help identify exceptional demand, automate the forecasting and planning process whilst allowing for human intervention at each stage with exceptions often highlighted.