Since its development in the late 1970s, the Just-in-Time (JIT) model for supplying manufacturers and retailers has come to dominate global demand forecasting and supply chain management. By cutting down the active supply of goods and parts to a small window through digital management, the Japanese carmaker Toyota pioneered a method that all but eliminated sprawling stockrooms and unintentional wastage. Parts arrived at the worker or robot, who added it to each car ‘just in time’ – creating a seamless, fast assembly line and supply chain. Demand forecasting, direct ordering, globalisation, and active data monitoring enhanced JIT further, creating intricate global supply chains to meet demand at the lowest possible cost to companies.
The art of demand forecasting for businesses can be incredibly tricky to get right at the best of times. Due to the COVID-19 pandemic, making accurate sales forecasts for 2020-2021 is a hard challenge for professional predictors.
Seemingly random local lockdowns, rapid changes in consumer behaviour and spending, an eccentric and hard-to-predict recession, and strange patterns of investment have made for a unique and chaotic landscape. Software and analysts rely on past data to produce an accurate picture of the future. When something unprecedented or unexpected happens, a rigid algorithm or basic model struggles to cope.
Being able to predict sales figures and strategising for periods of peak customer demand is central to a business’s success, as effective planning ensures an uninterrupted supply chain, low costs, competitive prices, and satisfied customers. Poor planning damages operations, restricts growth, and harms your reputation in the marketplace. Accurate forecasting is, therefore, essential. If your business model is due a review, take time to consider the potential implications of poor forecasting, to ensure your organisation doesn’t fall into the trap of not anticipating the future accurately.
‘Prediction is difficult, particularly when it involves the future,’ said Mark Twain, probably more than a little ironically, but demand forecasting is central to the success of manufacturing operations. Without it, it’s virtually impossible to accurately calculate how many of a product should be manufactured within a given period, not to mention ordering the appropriate amount of raw materials and deploying staff effectively on the production line.
This year, a large number of British B2C retailers will be looking to make up for lost time with a strong Q4 performance to offset months of poor trading and unprecedented falls in early-year customer spending.
However, a small, annoying, infectious, obnoxious being is still out there threatening Yuletide cheer – and it’s not one dreamt up by Dr Seuss. Continue reading “Don’t Let the Grinch Steal Christmas: Maximise your Post-Covid Xmas 2020 Retail Opportunities with Reflex Planning”
Planning for uncertainty is every business planner’s nightmare, but if there’s one thing that the Covid-19 pandemic has taught us, it’s always to expect the unexpected. Like the weather, market conditions can vary immensely, and even a lengthy spell of sustained growth can be interrupted by outside influences over which businesses have zero control. Continue reading “How To Plan For Demand In An Uncertain Market”
The global Coronavirus pandemic that emerged in January 2020 has cratered demand worldwide for essential and luxury goods, services, and trade-able items.
As a dreaded ‘Black Swan’ event, COVID-19 has meant that many industries have had to scrap and revise years of demand projections. The Bank of England now predicts a contraction of c.-13% by Q4 2020, the worst yearly recession on record since 1706 and the worst ever recorded in real terms (FT, 7th May 2020).
The COVID-19 outbreak that has paralyzed the UK has had tragic, damaging consequences for almost everyone alive today. However, it is also a rare, positive opportunity to learn and gather new information about behavior during an exceptional time.
Learning lessons from COVID-19 allows us to become far more resilient and better prepared for the next ‘Black Swan’ event that hits us as a society. Strengthening supply chains means that people as a whole are better protected from psychological, economic, and health shocks such as COVID-19. Excellent forward planning can help preserve businesses and open up opportunities for growth in challenging times.
Markets in almost every sector are changing more quickly than ever, and a combination of this and increasingly volatile demand can make it hard to maximise your sales potential. Demand forecasting is a crucial tool in achieving this effectively, allowing your team to work as efficiently as possible in turning your employees’ hard work into increased profits. Continue reading “How Demand Forecasting Can Help Your Business”
One of the most common misconceptions in sales is that demand forecasting is complex. It’s actually quite straightforward – but it isn’t easy. With the right approach and the right tools, though, you can succeed in forecasting demand and maximising your profits. Continue reading “How To Accurately Forecast Sales”