Planning & Forecasting
Demand Forecasting
Demand Forecasting: Mastering the Balancing Act
The concept of matching supply with demand is straightforward. Just strike the right balance between what your customers want and the inventory investment required to meet that demand.
Of course, it's not that easy. Buying too much wastes time, money and space—and exposes you to potential losses from liquidating overstocks. Underestimating demand leads to backorders, cancellations and unsatisfied customers who turn to your competitors.
Manhattan Associates' Demand Forecasting manages the balancing act between minimizing inventory investment and optimizing revenue opportunities. It provides a sophisticated, yet easy to use solution to the forecasting challenges that overwhelm many companies. Consider the complications the forecaster faces in anticipating demand, accurately and efficiently:
- Seemingly infinite combinations of locations, products and forecasting models
- The differing time horizons and forecasting methods for assortment planning, financial planning and replenishment planning
- The cleansing of historical demand
- Seasonal profiling
- Forecast exceptions
Demand Forecasting overcomes these challenges by providing a single source for statistical demand forecasting throughout the enterprise. Demand Forecasting does the heavy statistical lifting to provide the best trended, seasonally adjusted forecast possible. This frees planners and buyers to concentrate their time on the fine points of merchandise planning and inventory optimization to make profit for the company. And use it to generate and maintain appropriate forecasts at different levels of product and location. Demand Forecasting is synchronized with Financial Planning, Item Planning, Assortment Planning and Inventory Optimization.
To do better forecasting, Manage the Pitfalls
Demand Forecasting tackles four troublesome areas that, if not adeptly managed, can undermine the validity of a company's forecasting processes.
- Demand cleansing. Promotions, markdowns, weather and entry errors are just some of the factors that can distort your forecasts. Demand Forecasting has built-in demand cleansing so that forecasters won't be misled by these anomalies.
- Seasonal profiling. How do you account for seasonal curves? Demand Forecasting helps you identify trends and seasonal patterns to get a clear picture of the selling curve for a specific time period, product and location. Seasonal profile management in Demand Forecasting automatically accounts for seasonal curves related to moving holidays, has advanced profiling science that selects and assigns the best profile from multiple profile/aggregation iterations and can optionally do an automatic refresh of profiles just before an SKU comes into its next season.
- Demand Forecasting. Whether initializing a forecast for the first time, re-initializing after a structural change in demand history or periodically updating the forecast based on recent demand, Demand Forecasting uses our Unified Forecast Method™ that dynamically senses demand and adapts the proper forecasting components from multiple forecast methodologies to fit the demand signal that gives the best forecast.
- Exception management. Without an efficient, proactive approach to resolve forecast errors, managing exceptions can be time-consuming and costly. Our Advanced Exception Management gives you the flexibility to adjust the logic and business rules that govern the creation and management of exceptions. This tool improves productivity by enabling automatic detection and self-correction of many problems.
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Explore the Planning and Forecasting process - click the diagram below for an interactive approach to understanding Manhattan's solution.
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