Papers

Pratical Tips to Improve Demand Planning

If you have experience forecasting demand for products or services, you know that obtaining consistently good forecast accuracy is a mix of science and experience. By Logility

February 13, 2018

THE IMPORTANCE OF DEMAND PLANNING
Most executives agree that the ability to generate an accurate forecast has a significant impact on longterm business success. The forecast directly affects an organization’s ability to satisfy customers, manage resources and grow the business cost effectively.

An improvement in forecast accuracy—even just one percent—can have a ripple effect across the business including significantly reducing inventory buffers, obsolete products, expedited shipments, distribution center space, and non-value added work. In turn, these improvements can translate into higher customer fill rates, customer satisfaction and ultimately more revenue with higher margins.

A 1% Improvement in Forecast Accuracy Leads to...

  • 2.4% decrease in order-to-deliver days (cycle time)
  • 0.4% increase in perfect order performance (on time, in full)
  • 2.7% reduction in finished goods inventory (days)
  • 3.2% reduction in transportation costs (percent of sales)
  • 3.9% reduction in inventory obsolescence (percent of inventory value)

This e-book provides tips to leverage strong demand planning and optimization capabilities at your company.


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