Applying Demand Forecasting and Planning in Supply Chain Management

4/18/2014 Carsten Howitz Distribution

I wrote the other day about the need to be lean and agile to optimize operation and to be able to react to potential problems ahead of time.

In order to be lean and agile you have to be able to plan and forecast your demand. If you have no idea what your demand will be in the future you can never be lean or agile. Your sales history can help you forecast demand, but there are many other factors to consider. Sales forecasts, seasonality and current inventory levels are among other important factors that can’t be overlooked. Again this all comes down to having the right data and also being able to make the right decisions based on the data at hand.

To make sound tactical and strategic decisions that impact profitability, decision makers must have better control over the planning function. You must invest in supply chain planning education, systems, and practices that empower decision makers. Planners should have enough supply chain management understanding to know where to look, what questions to ask, and how to interpret information.

The combination of an effective system, along with forecasting and planning know-how, can yield significant results.

Read more here Supply Chain Management for Manufacturing Companies

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