You may have heard of weather forecasting in which the meteorologists, with the help of some tools, predict the future weather. But you may not have heard of data scientists who predict the market future and indulge in demand forecasting about the products and services of an organization.
It may sound a little strange to a layman; how and why do we need to predict about the product and the market behavior for that product, like why would anyone guess that will this product fare well in the next month or not, especially if it an essential product like milk or bread because everyone has to buy milk or eat bread, then why is this forecasting?
The answer is competition, there are so many producers of a single product or so many providers of one service that it becomes necessary for the manufacturers and companies to judge the customer behavior and devise the perfect plan for their product.
Demand forecasting is a statistical method in the supply chain management process in which, with the help of previous data and performance of a certain product or service, you can extrapolate the future demand pattern of your product or service. Demand planning or forecasting can be used interchangeably, in both the processes we undergo a meticulous study of the data and then according to the results obtained, we can devise the future strategy.
With the technological advancement that we see today, there are numerous tools and software that can do the job of demand forecasting for you. One such tool is Halo’s demand planning, which utilizes all the data of a certain product along with many other factors that go into the making of the product like financial factors, environmental factors, market stability, customer behavior, and various other price and non-price factors which contribute in deciding the demand of a product.
There are various uses of demand planning and forecasting which can help you run your business with better efficiency than before.
In the future, according to the results of the Halo’s demand planning software, there is going to be a boom in the market and you can observe that your product’s demand will rise, then you can prepare for the boom period and hire additional labor, collect raw materials before others so that you do not have to buy them at higher prices in the future and vice versa during the recession.
It can help you identify all the risks and opportunities that you can face in the future and give you enough time to exploit that opportunity to its fullest or help you prepare and devise a contingency plan for the risk you’re about to face.
In Toto, the demand planning or forecasting is a must for your organization if you want the best possible sales and growth in the market.