Demand forecasting

facebooktwittergoogle_plusredditpinterestlinkedinmail

 

Mycroft Assistant helps you to forecast demands and efficiently organize stock.

Work with demand forecasting report is complicated by the fact that each group of products often has its own features, such as:

– delivery time from the supplier;

– size of the required reserve stock (if the minimum threshold is crossed there is an increasing risk of shortages or overstocking). This figure must be monitored closely.

– minimum volume of purchase. This information allows a buyer to prepare an order that considers possible discounts. Sometimes it is possible to reduce the purchase price when buying a certain quantity, and this reduction can “outweigh” the cost of storing surplus.

As you can see, there are many variables in demand forecasting report, all of which are dedicated for inventory optimization.

The demand forecasting report contains information about the current status of each piece of the item, at the current time, in each of the reportable outlet (warehouse). This includes:

– current balance;

– amount of product in reserve;

– amount of product “in transit,” and estimated time of arrival;

– sales target for any specific product;

The set of data collected for each product allows Mycroft Assistant to evaluate the need for the formation of an order to a supplier. It takes into consideration the characteristics of the product, as well as other factors.

When demand forecasting report is used by a specialist, the result is the accurate generation of orders to suppliers. The order details what products the company must buy and in what quantity.

 

Demand forecasting report generation

 

Most accounting systems are able to generate some data on their own. However, the specialists who are engaged in the purchase of products collect data from multiple sources and place them in one large Excel spreadsheet.

This is a fairly common practice, which is justified in the early stages of a company’s operation, when the cost of an error is low and the product range is small. However, problems arise when:

– new approaches to the calculation are required, thus creating adjustment. This may be due to product seasonality, trends, and the “specialist’s” ability to create an accurate and automatic estimate of required reserve stock. In addition, potential future consumption is very hard to determine given the limitations of Excel and similar off-the-shelf programs.

– the volume of necessary calculations grows and the manager ends up spending time in front of the computer rather than engaging in the “managerial” work that profitable companies require in order to compete and thrive.

– the product range grid grows. It is quite easy to work in Excel when you have 100 product names, but it is next-to- impossible when you have about 10,000. The amount of work that must be done on such a large amount of data exceeds reasonable limits.

– there is an error in the calculations. A 2 percent margin of error when ordering products is not critical when the turnover is $ 100,000. However, the larger the turnover, the more impact even the smallest assessment error will have. The resulting issues include extreme shortages of products and missed sales, or overstocking to the extent that much a company’s assets are buried at the warehouse. On a side note, the cost of these errors is often much larger than the salary of the specialist who made them.

As you can see, the less often data must be “touched,” the fewer the mistakes. Mycroft Assistant allows you to upload your data automatically, to customize the type of data you enter, and then produces reports that are personalized to your company’s needs. Give up hand-entering and move to the next generation of reporting with Mycroft Assistant.

 

Mycroft Assistant demand forecasting report generation

 

Working within Excel eventually fails to satisfy most procurement specialists, so they look for alternative, specialized software. Mycroft Assistant is perfect for the job. It analyzes all pertinent data and creates orders that are aligned with company needs. Using our solution makes it easy to process the large amounts of information necessary to ensure accurate results. In fact, the more data provided, the more accurate the result.

To get started, integrate Mycroft Assistant with your accounting system. The end result will be a coherent demand forecasting report that is complete and fully functional.

This result is achieved because of Mycroft Assistant’s versatile customization options. You can set parameters for individual products as well as product groups.

 

Settings

 

Data about individual product seasonality can be calculated automatically based on sales records:

 

Seasonality

 

First, you fill out information about the properties of all products and upload data from your accounting system. Uploaded data includes (but is not limited to) current balance, goods in transit, and consumption records. Mycroft Assistant then automatically generates an demand forecasting report on the current state of reserves in each of your warehouses. It also calculates the quantity of products you need to purchase.

 

IMS recommendations

 

Mycroft Assistant processes each product in every warehouse. Here are the steps it performs automatically.

Step 1: Evaluation of the current state of stock balance (including the reserved products).

Step 2: Building of a forecast of average daily product consumption. After this is complete, Mycroft Assistant calculates a forecast of the time that will be spent delivering the products to your warehouse. The solution uses seasonal factors and the effect of established trends (which are automatically calculated) to produce these forecasts.

Step 3: Evaluation of the state of stocks in the future, while taking note of the products that are currently in transit (in accordance with their expected delivery dates).

Step 4: Decision-making. As an example, if the solution determines that the current balance of any specific product is insufficient to complete sales (taking future receipts into account), it will generate an accurate and informed recommendation about how much of the analyzed product must be ordered.

 

IMS recommendations

The demand forecasting report generated by Mycroft Assistant is detailed and easy to work with. It rivals or exceeds results that would be achieved by an expert who is experienced in setting up Excel.

Mycroft Assistant generates recommendations for that can be used for future processing. It breaks results down by each product and for each analyzed warehouses. The results produced are more accurate and reasonable, and can be obtained on demand, within a couple of minutes. There is no longer any need to spend hours on data collection and calculation.

Using Mycroft Assistant for inventory management will enable your company to reduce (or increase) its budget for inventory, increase product turnover, and make sure that there is never a “dead” balance” on the books. Accuracy in these areas provides positive impact on performance and company profits.

In addition to having accurate forecasts about purchasing requirements, it is also important for specialists to be able to monitor the current status of existing reserves in terms of provision and liquidity. You can read a report about stock provision HERE.

I you want your company to run at maximum efficiency, you must realize that assessing current replenishment needs is not enough. Procurement plans must be set in place that will alert you when further action is necessary. You can see information about the process of creating procurement plans HERE.

Know more:

— Inventory management – information about it you can find HERE ;

— Sales analysis – information about it you can find HERE ;

— Planning – information about it you can find HERE and HERE ;

If you want to get started with the Mycroft Assistant – where we have implemented everything necessary for you to work effectively, simply sign up HERE and follow the provided instructions.