For any economic activity, its main objective is always to fully satisfy the needs of its end customer. For this reason, the implementation of the forecast for your supply chain turns out to be of utmost importance. That is why no effort should be spared for the company to plan in the best way the development of a service or product.
If you are a small or medium entrepreneur (SMEs), you know better the implementation of this type of management will redound to benefits for your company.
Why implement the forecast in your supply chain?
It is vital before talking about the forecast, we highlight the importance of having a supported supply chain. And under the premise of satisfying the needs of your customers, the phases of your supply chain must achieve the following tasks:
- Being able to provide materials and services of the best quality, in the quantity and time necessary.
- Having the communication channels well established between the different links in the supply chain.
- Making the administration and coordination of economic activity adequate.
- Improving distribution and delivery times of products and services.
- Providing the necessary tools for good inventory management.
- Being effective in responding to market dynamics such as fluctuations in supply and demand.
Given the need to have a supply chain capable of fulfilling these tasks, the importance of good planning is obvious; and it is at this time that the forecast comes to fulfill its role.
What is the forecast?
The forecast is an instrument that allows, through statistical analysis and estimates, to forecast certain events within an economic activity. It will help that, with the support of well-supported data, decisions can be made and processes or projects in a business can be advanced.
To know the requirements of your customers, different challenges must be overcome in the supply chain. Maintaining an adequate supply of raw materials, avoiding deficiencies in inventory and developing efficient logistics for its distribution are some of these aspects.
The application of the forecast allows us to find ways to optimize these processes. And it does so through at least two basic methods:
- Analysis of quantitative data. It is founded on the historical information of the expenses and the sales of any economic activity. The analysis of this information can shed light on the behavior of the market in the future; This will let, to a certain degree, to anticipate the amount of raw material required, production costs and the efficiency of delivery logistics.
- Analysis of qualitative data. It is based on the intuitive information that can be provided by all staff with closer contact with the client. Analyzing this type of information will help provide feedback that will optimize your supply chain.
How to implement the forecast in your supply chain
How big is your company? Has there been a recent change in your supply chain? Do you want to forecast your sales for a year or less? These are examples of some questions to ask yourself before determining which forecasting method you want to implement to optimize your supply chain. Then you can follow these steps to implement the forecast:
- First, compile and analyze in detail the historical data of the most relevant processes of economic activities.
- Second, do the previous process, but with the current information of your company.
- Then, based on the comparison of the data collected in the first two actions, identify patterns of behavior that the market could be following; This will allow the forecast of future events that affect your supply chain.
- Using the results of this data comparison, a calendar of events can also be generated; This will help to respond to the demand or the turns that the market may have at a certain moment.
- Thanks to all these statistical analyzes, investments or budgets are established with very well supported bases.
- The collection and analysis of this information can also be used to forecast market dynamics. Aided by the forecast, your business can adjust or change its strategies to optimize your supply chain.
In conclusion, the implementation of the forecast in your supply chain will help your business to be more competitive, profitable and productive. Thus, you will be able to foresee the perception and vision that your clients have of your company and finally, to achieve their loyalty. At Looper we have the resources to be your best ally in the pursuit and fulfillment of this goal.