Sometimes have tons of inventory is actually a bad thing. If the market changes after you’ve recently stocked up on one trendy item, you could lose thousands of dollars.
You may think it’s impossible to predict the future. But you don’t need a crystal ball to see what might be in store for your business.
If you are looking for more information on supply chain forecasting benefits, keep reading. Listed below are the top five reasons you should definitely look into it!
1. Minimize Inventory Issues
Forecasting will drastically improve how you manage your business’s inventory levels. The software will help you know when to order higher volumes of products or materials to meet customer demands.
Using software to predict demand is essential if you work with any suppliers in other countries. This is because they tend to have a longer lead time.
2. Keep Customers Happy with Supply Chain Forecasting
Successful businesses have many things in common, but the most important similarity? Happy customers.
Focusing on forecasting future needs and desires helps improve customer experiences. This is because it lessens the chance they will try to order a product that is unavailable.
If customers do experience issues with ordering items and air their grievances online in a review, be sure to have a plan to mitigate the damage. Online reviews can impact your business.
3. Effective Production
When businesses can predict what their production needs will be, they can constantly stay on top of changing customer trends. Look to past peak sales times and look for common patterns.
Services like those offered by ODYN also can help track shipments and analyze patterns.
4. Safety Stock Requirements
When businesses can’t plan for sale expectations, they must rely on safety stock. Safety stock refers to the extra stock levels that businesses keep to avoid the risk of product or material shortages.
Forecasting decreases the size of your safety stock because you will be able to confidently plan for market changes.
5. Improve Pricing
Often, running different promotions and sales can make it difficult to manage stock levels. Having an integrated forecasting system will streamline the process, even with different sales running.
The importance of forecasting really shows when it comes to improving pricing.
For example, you could run different sales and promotions alongside your forecasting system each quarter. Then, you will be able to analyze your price data and sales over time.
Doing so will allow your team to make educated decisions about competitive pricing strategies. This is a data-driven business strategy. You aren’t just undercutting the competition or making snap decisions.
Time Improve Your Bottom Line
As you can see, there are many reasons to make full use of supply chain forecasting. By ensuring appropriate levels of products and streamlining production, forecasting can protect your investments for years to come.
Looking for more tips on ensuring the success of your business? Be sure to check out our guide on improving your overall return on investment (ROI)!