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Demand Planning and Forecasting - Training, Software and Consulting
UK based Forecast Solutions provides specialist training, forecasting software and consulting services for improved methods and process in demand planning and sales forecasting. Clients include companies across a broad range of industry sectors including food and drink, other household and consumer products, pharmaceuticals and healthcare, industrial, building products and automotive.
Expertise covers short term forecasting as needed to drive effective inventory and production planning as well as medium term forecasting that is often the driver in a sales and operations planning process. We are skilled in the fequently used time series forecasting methods such as moving averages and exponential smoothing, but also undertake causal analysis to create pricing models and investigate the effects on demand of other factors that my drive the business such as economic indices and unseasonal weather.
With any forecasting method it is often true that finding the best method for dealing with seasonality is a major factor in maximising forecast accuracy. The identification and forward projection of persistent trends in demand is always important, particularly for medium term forecasting. And for companies that carry out frequent promotions, dealing with those promotions in the forecasting system is often paramount, particularly for FMCG businesses. We are well equipped to advise on all of these subjects.
In terms of forecasting software, if the number of items to forecast is small and the requirements are simple, we may be able to provide a forecasting system in Excel or help develop the company's own system in Excel. Alternatively, we offer a choice of two carefully researched and cost-effective packaged solutions. Details are given on our software page and a no-obligation demonstration of either product can be arranged. If the needs are complex and the direction to take is not clear, we can help draw up a software requirement and facilitate a software selection process to assist in choosing the most appropriate forecasting solution.
Demand Planning and Forecasting Training
Demand planning and sales forecasting training is a major part of the Forecast Solutions offering. The aim is to provide courses and workshops that are practical and non-academic, but sufficiently detailed to impart a detailed understanding of the most important methods. Different approaches to sales forecasting are explored, including subjective methods, causal analysis and time series forecasting. Effective methods for dealing with the crucial matters of seasonality, promotions and new products are discussed.
The most popular demand planning training course is the two day Demand Planning and Forecasting Workshop. As well as the basics of forecasting This also covers forecast accuracy measurement, the use of EPOS data and stock policy including the calcualtion of safety stock for fast moving and slow moving items. Demand planning training courses are geared to be useful regardless of any particular forecasting software that is used in the company and Excel is used as a common language for worked examples. However, if forecasting in Excel is a requirement, there is a course option specifically for that.
Click here to read more about Forecasting Courses.
Causal Analysis including Pricing Models
Demand is often affected by causal factors such as price relationships, unseasonal weather or economic indicators such as GDP. It can be highly beneficial to carry out analysis to validate the importance of suspected factors and to quantify their effects. Such causal analysis can be an important element in the overall forecasting solution and can help define pricing strategy and other business strategy.
Forecast Solutions is skilled in the use of specialist statistical software to examine such vital areas as Price Sensitivity and the effects of economic leading indicators. Unseasonal weather can drive significant changes in demand, so a study to quantify Weather Sensitivity can be very helpful for sales forecasting.
Time Series Forecasting
Many sales forecasting systems rely on the simple forecasting methods of time series projection, thus analysing sales trends and seasonality in the history and projecting into the future. Both curve fitting and the commonly used exponential smoothing methods fall into this category.
In medium term forecasting such as for Sales and Operations Planning, it is important to reflect product life cycles and expected changes in the competitive and technological environment. Short Term Demand Forecasting and planning is more to do with detailed tracking and management of short term demand in order to minimise inventory and maximise customer service.
FMCG Forecasting and Promotions
The presence of past promotional activity in the historical data that is to be used as the basis for demand forecasting can cause problems in FMCG Forecasting. It affects seasonal analysis, choice of forecasting model and setting the correct level of forecast demand. Therefore the sales history often needs to be cleansed of promotions before it is submitted to statistical forecasting.
Then there is the question of how to approach the Promotional Forecasting going forward. If promotions have occurred frequently in the past, a good option is to try to build promotional profiles through analysis of previous promotions. Otherwise a more manual approach may be needed. Sometimes it is helpful to keep the promotional forecast separate from the baseline.
Seasonality in Forecasting
Finding the best way of dealing with Seasonality in Forecasting is an essential element in sales forecasting for many businesses and can sometimes dominate the forecasting task. Seasonal analysis becomes harder as the data becomes more detailed, so it is often useful to use a GSI (group seasonal indices) approach.
Smaller time buckets also make the calculation of seasonal indices more difficult, therefore the task is more difficult with weekly as opposed to monthly forecasting. This sometimes contradicts an intention to improve forecast accuracy by forecasting in smaller time buckets.
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Improved forecast accuracy is vital in short term sales forecasting leads in order to lower stock levels, reduced operational costs and provide better customer service. For medium term forecasting, such as that needed for sales and operations planning, an accurate forecast is essential for best business and financial planning.
Forecast Solutions can carry out a forecast accuracy health check by measuring forecast accuracy achieved in the past and comparing with the accuracy that could have been achieved using improved statistical forecasting methods
Click here for information on how to measure Forecast Accuracy.
Forecasting Process Improvement
In a program for forecasting process improvement the first step is usually to understand current methods and assess how successful they are in meeting business objectives. Measurement of current forecast accuracy will play a part , together with exploration of potential gains in accuracy that might be achieved from forecasting process improvements.
The aim then is to identify improvements that can be made involving the forecasting infrastructure, methods and processes, with a view to improved forecast accuracy going forward. If there is significant benefit to be achieved by consideration of new or improved forecasting software, Forecast Solutions is well placed to help.
If internal resource is not available, Forecast Solutions can fill the gap by providing an expert sales forecasting service. A number of alternative methods of delivery are possible, ranging from regular on-site visits to a full remote service, the aim being to complement existing resource in the best possible way.
In a fully outsourced service, specialist econometrics and forecasting software is brought to bear to provide a baseline statistical forecast that can then be reviewed and modified by those in the business with detailed commercial knowledge.
Click here for information on Sales Forecasting Services