Key Reasons Why Demand Forecasting is Important in SCM

1. Key Reasons Why Demand Forecasting is Important in SCM Demand and supply are the balancing aspects in any supply chain network. For businesses to work well and profitably it is important to ensure timely and accurate demand forecasting. This need brings in the valuable services of an analytics company offering reliable and assured supply chain solutions. 3SC is one of leading names in the market that makes your network management smooth and error-free. In case you are looking for dependable and cost effective SCM solutions, connect with the team at https://3scsolution.com/. In supply chain management, demand forecasting in logistics acts as a backbone. It is the act predicting, setting the supply in line with the same and keeping the price competitive to have this cycle going. The task of demand forecasting is expansive since it includes conducting investigation on the competition, sourcing supplier data, and assessing patterns of demand to set goals for the future. Key factors why demand forecasting in logistics is highly critical are outlined below: Process planning: All the processes are planned scheduled basis the forecasting data in hand. The planning is thus done balancing the past and present demand for products which enables the SCM function chain to stay on top of the game. Set a number: With accurate demand forecasting in logistics, it is easy to predict product demand even in most specific situations. Making informed decisions basis patterns in past, a company set the production number as close as possible.

2. Changing demand: It is very common for the demand to change as per the season which also helps the business in realigning the promotional activity and product launches. Such back up predictions leaves very less for guesswork. Minimize safety stock: This means keeping excess stock in case net demand increases. By conducting demand forecasting, this extra holding cost will be waived off and frees up storage space. Customer content: This activity also focusses on fulfilling customer needs by enabling supply of enough product meeting the demand with short lead times. This also helps in improving the brand and customer relationship. Noinventory stockouts: Especially in case of JIT (Just In Time) systems, it becomes essential to buy from long lead time suppliers. Here, demand forecasting enables the inventory to sit for lesser time in storage which saves storage cost and reduced the chances of wastage. Better shipping system: The two main functions in the logistics industry are supply and demand. It becomes extremely important to predict the demand for a product to enable the supply chain managers to act on time. They can be prepared to have enough workers to ensure timely and seamless shipment of a certain amount of product. Falling short on stock or manpower can lead to glitches and affect the entire shipping system. Pre-planning helps in keeping the labor cost in check. Improved pricing: Price forecasting is a powerful tool that enables great control over the sale number. Pulling down the price within profitable margins can affect the overall supply chain positively.