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
Correlation vs Causation: Is This Relevant to Your Job?
Outside of work, you may have heard the famous dictum “Correlation is not causation.” It may sound like a piece of theoretical fluff that, though involved in a recent Noble Prize in economics, isn’t relevant to your work as a demand planner. Is so, you may be only partially correct.
Types of forecasting problems we help solve
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. Here are examples of forecasting problems that SmartForecasts can solve, along with the kinds of business data representative of each.
Three Ways to Estimate Forecast Accuracy
Forecast accuracy is a key metric by which to judge the quality of your demand planning process. Once you have forecasts, there are several ways to summarize their accuracy, usually designated by obscure three- or four-letter acronyms like MAPE, RMSE, and MAE.
What Silicon Valley Bank Can Learn from Supply Chain Planning
If you had your head up lately, you may have noticed some additional madness off the basketball court: The failure of Silicon Valley Bank. Those of us in the supply chain world may have dismissed the bank failure as somebody else’s problem, but that sorry episode holds a big lesson for us, too: The importance of stress testing done right.
Is your demand planning and forecasting process a black box?
There’s one thing I’m reminded of almost every day at Smart Software that puzzle me: most companies do not understand how forecasts are created, and stocking policies are determined. It’s an organizational black box. Here is an example from a recent sales call:
Fifteen questions that reveal how forecasts are computed in your company
In a recent LinkedIn post, I detailed four questions that, when answered, will reveal how forecasts are being used in your business. In this article, we’ve listed questions you can ask that will reveal how forecasts are created.
Recent Posts
Prepare your spare parts planning for unexpected shocksIn today's unpredictable business climate, we do have to worry about supply chain disruptions, long lead times, rising interest rates, and volatile demand. With all these challenges, it's never been more vital for organizations to accurately forecast parts usage, stocking levels, and to optimize replenishment policies such as reorder points, safety stocks, and order quantities. In this blog, we'll explore how companies can leverage innovative solutions like inventory optimization and parts forecasting software that utilize machine learning algorithms, probabilistic forecasting, and analytics to stay ahead of the curve and protect their supply chains from unexpected shocks. […]
Uncover data facts and improve inventory performanceThe best inventory planning processes rely on statistical analysis to uncover relevant facts about the data. When you have the facts and add your business knowledge, you can make more informed stocking decisions that will generate significant returns. You'll also set proper expectations with internal and external stakeholders, ensuring there are fewer unwelcome surprises. […]
Electric Utilities’ Problems with Spare PartsEvery organization that runs equipment needs spare parts. All of them must cope with issues that are generic no matter what their business. Some of the problems, however, are industry specific. This post discusses one universal problem that manifested in a nuclear plant and one that is especially acute for any electric utility. […]
Correlation vs Causation: Is This Relevant to Your Job?Outside of work, you may have heard the famous dictum “Correlation is not causation.” It may sound like a piece of theoretical fluff that, though involved in a recent Noble Prize in economics, isn’t relevant to your work as a demand planner. Is so, you may be only partially correct. […]
Smart Software Customer, Arizona Public Service to Present at USMA 2023Smart Software CEO and APS Inventory & Logistics Manager to present USMA 2023 Session on APS supply chain transformation project and the role of inventory optimization technology in their new process. […]
Inventory Optimization for Manufacturers, Distributors, and MRO
- Prepare your spare parts planning for unexpected shocksIn today's unpredictable business climate, we do have to worry about supply chain disruptions, long lead times, rising interest rates, and volatile demand. With all these challenges, it's never been more vital for organizations to accurately forecast parts usage, stocking levels, and to optimize replenishment policies such as reorder points, safety stocks, and order quantities. In this blog, we'll explore how companies can leverage innovative solutions like inventory optimization and parts forecasting software that utilize machine learning algorithms, probabilistic forecasting, and analytics to stay ahead of the curve and protect their supply chains from unexpected shocks. […]
- Electric Utilities’ Problems with Spare PartsEvery organization that runs equipment needs spare parts. All of them must cope with issues that are generic no matter what their business. Some of the problems, however, are industry specific. This post discusses one universal problem that manifested in a nuclear plant and one that is especially acute for any electric utility. […]
How to Forecast Spare Parts with Low UsageWhat do you do when you are forecasting an intermittently demanded item, such as a spare part, with an average demand of less than one unit per month? Most of the time, the demand is zero, but the part is significant in a business sense; it can’t be ignored and must be forecasted to be sure you have adequate stock. […]
Spare Parts, Replacement Parts, Rotables, and Aftermarket PartsThose new to the parts planning game are often confused by the many variations in the names of parts. This blog points out distinctions that do or do not have operational significance for someone managing a fleet of spare parts and how those differences impact inventory planning. […]
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
Accurate Demand Forecasts
Best Forecasting Methods
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
