Imagine you are the director of supply chain management for an apparel manufacturer, and you are responsible for forecasting demand for all of your clothing lines. Like many companies, your team uses spreadsheet-based forecasts to predict demand by product and region. Lately, large forecast errors have caused you to overstock some products in specific geographic areas that had to be marked down significantly to sell, resulting in losses of margin. At the same time, you have had errors on other products and regions that have caused you to stock out and lose sales. Both of these errors caused you to lose money. As a result, you have had to significantly increase your inventory levels to avoid out-of-stock situations. What can you do to improve your forecasting accuracy?
Inventory and transportation are the largest cost areas over which supply chain managers have some control. Reducing inventory levels would reduce your company’s total costs. One way to reduce inventory is to improve your forecasting accuracy for product demand. If there is higher forecast error (less accurate forecasts), then more inventory has to be carried to cover for these errors.
One method to reduce forecast error is to select and implement a forecasting software package. These packages can improve forecasting accuracy and reduce manual effort. The process of selecting a forecasting software package can be made easier with some key information.
What information would help you select the best forecasting package for your company, and what benefits should the package provide? The Accenture Academy course Leveraging Technology to Enhance Forecasting Processes
provides the tools to help improve your forecasting processes and demonstrates how to select the best forecasting solution. In addition, it provides key information on determining essential functionality of a software package and explains the importance of resolving technological issues before a package is chosen and implemented.