Statistical Forecasting Blog

Optimize Inventory planning parameters,improve service levels and increase revenue

Forecasting is a fully developed business process that most organizations still struggle with today. Almost everyone’s top priority is probably to be able to consistently and accurately forecast Sales, Demand, Costs, Inventory, etc.  The inability to obtain a good forecast frequently has a significant business impact. Inaccurate forecasting leads to overstocking or running out, resulting in high costs and excess, impacting the bottom line and the success of the company.

A good forecast should give you enough confidence to make sound business decisions. For a more efficient forecast, consider these best practices:

  • What are the most common forecasting methods, and why do they produce inaccurate results.
  • How to achieve better ROI and optimal processes through scale, granularity, and agility
  • How to improve forecasting accuracy
  • How to use simple machine learning and artificial intelligence tools to get accurate and scalable forecasts
Daily Demand Scenarios

Daily Demand Scenarios

In this Videoblog, we will explain how time series forecasting has emerged as a pivotal tool, particularly at the daily level, which Smart Software has been pioneering since its inception over forty years ago. The evolution of business practices from annual to more refined temporal increments like monthly and now daily data analysis illustrates a significant shift in operational strategies.

read more
The Methods of Forecasting

The Methods of Forecasting

Demand planning and statistical forecasting software play a pivotal role in effective business management by incorporating features that significantly enhance forecasting accuracy. One key aspect involves the utilization of smoothing-based or extrapolative models, enabling businesses to quickly make predictions based solely on historical data. This foundation rooted in past performance is crucial for understanding trends and patterns, especially in variables like sales or product demand. Forecasting software goes beyond mere data analysis by allowing the blending of professional judgment with statistical forecasts, recognizing that forecasting is not a one-size-fits-all process. This flexibility enables businesses to incorporate human insights and industry knowledge into the forecasting model, ensuring a more nuanced and accurate prediction.

read more
Can Randomness be an Ally in the Forecasting Battle?

Can Randomness be an Ally in the Forecasting Battle?

When we try to understand the complex world of logistics, randomness plays a pivotal role. This introduces an interesting paradox: In a reality where precision and certainty are prized, could the unpredictable nature of supply and demand actually serve as a strategic ally?
The quest for accurate forecasts is not just an academic exercise; it’s a critical component of operational success across numerous industries. For demand planners who must anticipate product demand, the ramifications of getting it right—or wrong—are critical. Hence, recognizing and harnessing the power of randomness isn’t merely a theoretical exercise; it’s a necessity for resilience and adaptability in an ever-changing environment.

read more
The Objectives in Forecasting

The Objectives in Forecasting

A forecast is a prediction about the value of a time series variable at some time in the future. For instance, one might want to estimate next month’s sales or demand for a product item. A time series is a sequence of numbers recorded at equally spaced time intervals; for example, unit sales recorded every month. The objectives you pursue when you forecast depend on the nature of your job and your business. Every forecast is uncertain; in fact, there is a range of possible values for any variable you forecast. Values near the middle of this range have a higher likelihood of actually occurring, while values at the extremes of the range are less likely to occur.

read more

Recent Posts

  • Overcoming Uncertainty with Service and Inventory Optimization TechnologyOvercoming Uncertainty with Service and Inventory Optimization Technology
    In this blog, we will discuss today's fast-paced and unpredictable market and the constant challenges businesses face in managing their inventory and service levels efficiently. The main subject of this discussion, rooted in the concept of "Probabilistic Inventory Optimization," focuses on how modern technology can be leveraged to achieve optimal service and inventory targets amidst uncertainty. This approach not only addresses traditional inventory management issues but also offers a strategic edge in navigating the complexities of demand fluctuations and supply chain disruptions. […]
  • Daily Demand Scenarios Smart 2Daily Demand Scenarios
    In this Videoblog, we will explain how time series forecasting has emerged as a pivotal tool, particularly at the daily level, which Smart Software has been pioneering since its inception over forty years ago. The evolution of business practices from annual to more refined temporal increments like monthly and now daily data analysis illustrates a significant shift in operational strategies. […]
  • 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. […]
  • Learning from Inventory Models Software AILearning from Inventory Models
    In this video blog, the spotlight is on a critical aspect of inventory management: the analysis and interpretation of inventory data. The focus is specifically on a dataset from a public transit agency detailing spare parts for buses. […]
  • The methods of forecasting SoftwareThe Methods of Forecasting
    Demand planning and statistical forecasting software play a pivotal role in effective business management by incorporating features that significantly enhance forecasting accuracy. One key aspect involves the utilization of smoothing-based or extrapolative models, enabling businesses to quickly make predictions based solely on historical data. This foundation rooted in past performance is crucial for understanding trends and patterns, especially in variables like sales or product demand. Forecasting software goes beyond mere data analysis by allowing the blending of professional judgment with statistical forecasts, recognizing that forecasting is not a one-size-fits-all process. This flexibility enables businesses to incorporate human insights and industry knowledge into the forecasting model, ensuring a more nuanced and accurate prediction. […]

    Inventory Optimization for Manufacturers, Distributors, and MRO

    • 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. […]
    • Whyt MRO Businesses Should Care about Excess InventoryWhy MRO Businesses Should Care About Excess Inventory
      Do MRO companies genuinely prioritize reducing excess spare parts inventory? From an organizational standpoint, our experience suggests not necessarily. Boardroom discussions typically revolve around expanding fleets, acquiring new customers, meeting service level agreements (SLAs), modernizing infrastructure, and maximizing uptime. In industries where assets supported by spare parts cost hundreds of millions or generate significant revenue (e.g., mining or oil & gas), the value of the inventory just doesn’t raise any eyebrows, and organizations tend to overlook massive amounts of excessive inventory. […]
    • Top Differences between Inventory Planning for Finished Goods and for MRO and Spare PartsTop Differences Between Inventory Planning for Finished Goods and for MRO and Spare Parts
      In today’s competitive business landscape, companies are constantly seeking ways to improve their operational efficiency and drive increased revenue. Optimizing service parts management is an often-overlooked aspect that can have a significant financial impact. Companies can improve overall efficiency and generate significant financial returns by effectively managing spare parts inventory. This article will explore the economic implications of optimized service parts management and how investing in Inventory Optimization and Demand Planning Software can provide a competitive advantage. […]

    Problem

    Generating accurate statistical forecasts isn’t an easy task. Planners need to keep historical data continually up to date, build and manage a database of forecasting models, know which forecast methods to use, keep track of forecast overrides, and report on forecast accuracy. These steps are typically managed in a cumbersome spreadsheet that is often error-prone, slow, and difficult to share with the rest of the business. Forecasts tend to rely on one-sized fits all methods that require seasonality and trend to be added manually resulting in inaccurate predictions of what comes next

    Solution

    SmartForecasts™ Cloud is a statistical forecasting solution available on Smart’s Inventory Planning and Optimization Platform, Smart IP&O. It provides a statistically sound, objective foundation for your sales and operations planning process (S&OP). SmartForecasts automatically selects the most accurate forecasting method, allows users to fine-tune statistical and user-defined models, enables forecast and historical overrides, and automatically measures forecast error and bias. Forecast overrides are tracked and historical data is automatically updated eliminating the manual effort accompanying spreadsheet-based solutions. Coupled with Smart’s ERP connectors, results can be pushed to your ERP system of choice automatically. The result is more efficient sales planning, budgeting, production scheduling, ordering, and inventory planning process.

      Get the Product Sheet

      SmartForecasts ® Cloud

      Logo for Statistical modeling and optimization

      Accurate Demand Forecasts

      Gears logo ERP Integrations

      Best Forecasting Methods

      A11 Excel Problem Planning

      Imports Historical Data

      What can you do with SmartForecasts?
      • Run a forecasting tournament that selects the right forecasting method for each item.
      • Hand-craft forecasts using several time-series forecasting methods and non-statistical methods.
      • Automatically predict trends, seasonality, and cyclical patterns.
      • Imports demand data from files
      • Leverage ERP connectors to automatically import demand data and return forecast results
      Who is SmartForecasts for?

      • Demand Planners.
      • Forecast Analysts.
      • Material & Inventory Planners.
      • Operational Research Professionals.
      • Sales Analysts.
      • Statistcally Minded Executives.

      A Reliable and Secure Platform