The COVID-19 pandemic, coupled with geopolitical conflicts and trends in deglobalization, has disrupted the supply chain all over the world, bringing instability and higher costs to different economies. The supply chain discrepancies put extra pressure on long-standing operations models, from procurement to just-in-time delivery, with unexpected repercussions. In situations like this, developing the most accurate forecast for the future demand for a product or service can be challenging.

In this environment, a reasonable way to transform your business’s performance is via an effective demand planning process. However, accurately planning future demand under these fragile market conditions is complex, making it challenging to positively influence profit margins. Many businesses face this problem and fail to evaluate accurate future numbers for their demand. This consistent inability to forecast accurately results in higher inventory levels, unsatisfied customers, and missed market opportunities. For continued resiliency and profitability, organizations need to understand demand planning challenges and find effective solutions.

Modern forecasting methods enable shock-proof supply chains

There has been a decade-long focus on supply chain management — minimizing costs, refining resource management and inventory optimization, reducing disruptions, and improving visibility to avoid supply chain discrepancies. When unforeseen market shifts hit, businesses become aware of the sensitivity of their supply chain to global uncertainties.

Modern demand forecasting enhances visibility end to end across the supply chain and supports the mitigation of disruptive events. Recent supply chain solutions resolve departmental siloes, and businesses can leverage collaboration, agility, and optimization throughout the supply chain management process. Companies that deploy accurate demand planning and forecasting measures are better prepared to deal with unexpected events, such as pandemics, union strikes, and sudden demand spikes.

Effective management mitigates demand planning challenges and drives supply chain resiliency

Businesses that use modern forecasting models for a connected supply chain planning approach can eliminate departmental siloes and improve decision-making efficiency.

Breaking down team siloes: By merging siloed planning via a single demand planning software, companies can execute tasks quickly, freeing up resources for more value-added activities. More so, increased visibility enables business leaders to deliver more value across the organization.

Effective decision making: A connected demand planning and forecasting approach allows fast access to meaningful data. With advanced technologies like machine learning and AI, it is easy to discover trends and patterns in a constantly changing world. Complete visibility and immediate utilization of massive data sets also provide businesses more time to make strategic decisions when reacting to significant changes in this uncertain environment.

When adapting to a new forecasting model, organizations should first focus on their most crucial demand planning challenge. Once this has been located and addressed, effective demand planning enables risk assessment across the complete supply chain, analyzing business data to uncover and understand any weaknesses. Then, empowered with this vital information, at times of disruption key stakeholders can make essential supply chain decisions to protect revenue, cash flow, and margins by seamlessly integrating the entire supply chain system.

We all understand that traditional demand planning processes and conventional statistical modeling deliver diminishing value. The business landscape today requires a fresh approach to forecasting. But for that to occur, businesses must plan and integrate market intelligence, advanced analytics, and internal and external collaboration across multiple channels of their supply chain management.

Organizations address business imperatives by taking a comprehensive supply chain planning approach to increase demand planning accuracy. This enhances confidence in top-line revenue projections, capital investments, operating expenses, and material purchase requirements. Effective demand planning KPIs incorporating financial and operational decisions deliver supply chain resiliency. Streamlining supply chain and business decisions in a single dashboard enables businesses to master market volatility by acting collaboratively, responding swiftly and confidently, and creating plans for multiple scenarios.

Build resilient supply chain management with Avercast

Avercast, A TransImpact company, provides industry-leading demand planning software to access end-to-end visibility into your future demand. With more than 250 algorithms, our solutions can deliver accurate predictions into demand forecasting. Avoid uncertainties like overstocking and understocking, and always be prepared to face major market shifts with Avercast. To understand more about our solutions, talk to our experts or schedule a demo.