The Smart Forecaster

 Pursuing best practices in demand planning,

forecasting and inventory optimization

We are often asked what the difference is between these two important performance metrics for inventory planning. While they are both important for measuring how successful a business is in meeting demand, their meaning is very different.  If not understood and incorporated into the strategic inventory planning process, inventory will be inefficiently allocated resulting in lower customer service and higher carrying costs.  We’ve illustrated the difference in this 4 minute recording using Microsoft Excel.

 

 

 

Graphic to approach is advocated nearly universally for assessing forecast accuracySmart Operational Analytics automatically calculates historical service levels & fill rates across any item.  To see how you calculate these and other operational metrics including inventory turns, supplier performance, and more register below to watch a five minute demonstration.  The demo will show how our cloud platform continuously calculates and reports these metrics across thousands of items helping you identify opportunities for service level improvement and inventory reduction.

 

    Your Name *

    Company Name *

    Work Email *

    Work Phone


     

    Leave a Comment

    Related Posts

    The Importance of Clear Service Level Definitions in Inventory Management

    The Importance of Clear Service Level Definitions in Inventory Management

    Inventory optimization software that supports what-if analysis will expose the tradeoff of stockouts vs. excess costs of varying service level targets. But first it is important to identify how “service levels” is interpreted, measured, and reported. This will avoid miscommunication and the false sense of security that can develop when less stringent definitions are used. Clearly defining how service level is calculated puts all stakeholders on the same page. This facilitates better decision-making.

    The Cost of Spreadsheet Planning

    The Cost of Spreadsheet Planning

    Companies that depend on spreadsheets for demand planning, forecasting, and inventory management are often constrained by the spreadsheet’s inherent limitations. This post examines the drawbacks of traditional inventory management approaches caused by spreadsheets and their associated costs, contrasting these with the significant benefits gained from embracing state-of-the-art planning technologies.

    Leveraging Epicor Kinetic Planning BOMs with Smart IP&O to Forecast Accurately

    Leveraging Epicor Kinetic Planning BOMs with Smart IP&O to Forecast Accurately

    In this blog, we explore how leveraging Epicor Kinetic Planning BOMs with Smart IP&O can transform your approach to forecasting in a highly configurable manufacturing environment. Discover how Smart, a cutting-edge AI-driven demand planning and inventory optimization solution, can simplify the complexities of predicting finished goods demand, especially when dealing with interchangeable components. Learn how Planning BOMs and advanced forecasting techniques enable businesses to anticipate customer needs more accurately, ensuring operational efficiency and staying ahead in a competitive market.

    Recent Posts

    • The Importance of Clear Service Level Definitions in Inventory ManagementThe Importance of Clear Service Level Definitions in Inventory Management
      Inventory optimization software that supports what-if analysis will expose the tradeoff of stockouts vs. excess costs of varying service level targets. But first it is important to identify how “service levels” is interpreted, measured, and reported. This will avoid miscommunication and the false sense of security that can develop when less stringent definitions are used. Clearly defining how service level is calculated puts all stakeholders on the same page. This facilitates better decision-making. […]
    • Future-Proofing Utilities. Advanced Analytics for Supply Chain OptimizationFuture-Proofing Utilities: Advanced Analytics for Supply Chain Optimization
      Utilities in the electrical, natural gas, urban water, and telecommunications fields are all asset-intensive and reliant on physical infrastructure that must be properly maintained, updated, and upgraded over time. Maximizing asset uptime and the reliability of physical infrastructure demands effective inventory management, spare parts forecasting, and supplier management. A utility that executes these processes effectively will outperform its peers, provide better returns for its investors and higher service levels for its customers, while reducing its environmental impact. […]
    • The Cost of Doing nothing with your inventory Planning SystemsThe Cost of Spreadsheet Planning
      Companies that depend on spreadsheets for demand planning, forecasting, and inventory management are often constrained by the spreadsheet’s inherent limitations. This post examines the drawbacks of traditional inventory management approaches caused by spreadsheets and their associated costs, contrasting these with the significant benefits gained from embracing state-of-the-art planning technologies. […]
    • Simple Inventory Optimization is Good Except When It Isn’t FHDSimple is Good, Except When It Isn’t
      In this blog, we are steering the conversation towards the transformative potential of technology in inventory management. The discussion centers around the limitations of simple thinking in managing inventory control processes and the necessity of adopting systematic software solutions. […]
    • Leveraging Epicor Kinetic Planning BOMs with Smart IP&O to Forecast Accurately HDLeveraging Epicor Kinetic Planning BOMs with Smart IP&O to Forecast Accurately
      In this blog, we explore how leveraging Epicor Kinetic Planning BOMs with Smart IP&O can transform your approach to forecasting in a highly configurable manufacturing environment. Discover how Smart, a cutting-edge AI-driven demand planning and inventory optimization solution, can simplify the complexities of predicting finished goods demand, especially when dealing with interchangeable components. Learn how Planning BOMs and advanced forecasting techniques enable businesses to anticipate customer needs more accurately, ensuring operational efficiency and staying ahead in a competitive market. […]

      Inventory Optimization for Manufacturers, Distributors, and MRO

      • Future-Proofing Utilities. Advanced Analytics for Supply Chain OptimizationFuture-Proofing Utilities: Advanced Analytics for Supply Chain Optimization
        Utilities in the electrical, natural gas, urban water, and telecommunications fields are all asset-intensive and reliant on physical infrastructure that must be properly maintained, updated, and upgraded over time. Maximizing asset uptime and the reliability of physical infrastructure demands effective inventory management, spare parts forecasting, and supplier management. A utility that executes these processes effectively will outperform its peers, provide better returns for its investors and higher service levels for its customers, while reducing its environmental impact. […]
      • Centering Act Spare Parts Timing Pricing and ReliabilityCentering Act: Spare Parts Timing, Pricing, and Reliability
        In this article, we'll walk you through the process of crafting a spare parts inventory plan that prioritizes availability metrics such as service levels and fill rates while ensuring cost efficiency. We'll focus on an approach to inventory planning called Service Level-Driven Inventory Optimization. Next, we'll discuss how to determine what parts you should include in your inventory and those that might not be necessary. Lastly, we'll explore ways to enhance your service-level-driven inventory plan consistently. […]
      • Why MRO Businesses Need Add-on Service Parts Planning & Inventory SoftwareWhy MRO Businesses Need Add-on Service Parts Planning & Inventory Software
        MRO organizations exist in a wide range of industries, including public transit, electrical utilities, wastewater, hydro power, aviation, and mining. To get their work done, MRO professionals use Enterprise Asset Management (EAM) and Enterprise Resource Planning (ERP) systems. These systems are designed to do a lot of jobs. Given their features, cost, and extensive implementation requirements, there is an assumption that EAM and ERP systems can do it all. In this post, we summarize the need for add-on software that addresses specialized analytics for inventory optimization, forecasting, and service parts planning. […]
      • Spare-parts-demand-forecasting-a-different-perspective-for-planning-service-partsThe Forecast Matters, but Maybe Not the Way You Think
        True or false: The forecast doesn't matter to spare parts inventory management. At first glance, this statement seems obviously false. After all, forecasts are crucial for planning stock levels, right? It depends on what you mean by a “forecast”. If you mean an old-school single-number forecast (“demand for item CX218b will be 3 units next week and 6 units the week after”), then no. If you broaden the meaning of forecast to include a probability distribution taking account of uncertainties in both demand and supply, then yes. […]