Analyze your business's future with demand forecasting software

Demand Forecasting Software: Challenges in Forecasting and How to Solve Them

What do calculators, dishwashers, and chatbots have in common? All are automated tools that humans use to resolve their problems.

Similarly, automated demand forecasting software solves manual challenges better than spreadsheets and helps streamline your supply chain by identifying exactly what inventory to order and when to order it to effectively fulfill demand. But what challenges may you experience when forecasting demand for your products?

Automated forecasting software can be an excellent solution for your business. But pitfalls can lie in the process. In this article, we will look at challenges in the forecasting process and how to counter those issues.

Why is demand forecasting essential?

Enterprise demand forecasting is one of the most important components for a business, because your decision-making process depends entirely on accurate predictions.

Planning

An accurate demand forecast enables you to order the bestselling products and cut down on the slow-moving products. This process allows you to maintain the right amount of stock in your inventory. Effective planning reduces excess inventory and improves your inventory optimization process.

Time savings

Evaluating future demand, scheduling deliveries, and managing inventory space can be massive time drainers for your business. Automating as much of this as possible can save you time and enable you to operate more efficiently. Efficient demand forecasting software can help you streamline all those aspects.

Pricing

Demand forecasting has a huge impact on the price elasticity of every product. This means that a set price's effect on demand is a crucial factor when setting processes, markdowns, or running promotions. An accurate demand forecast enables you to set prices that result in the highest ROI.

Customer experience

Your customers come to your shop or e-commerce platform looking for a particular product in a specific time frame. If you cannot deliver that product to your customers, they will turn to your competitors, leaving you with missed sales opportunities.

Challenges that can occur while forecasting demand

Sudden changes in demand

When you run a business, you know that you should always expect the unexpected. The dynamic nature of every business means that unwanted changes in demand are unavoidable. You may face trouble if your demand forecasting efforts are unprepared to anticipate these changes.

It's simple to consider changes in customer demand due to seasonality or promotions, but how can you anticipate changes caused by demographic shifts, local events, changes in customer preferences, and many other factors?

Obviously, it isn't easy to consider every scenario. The easier way to avoid this challenge is to maintain safety stock in case of emergencies. You can also apply solutions like Avercast software that provide end-to-end visibility into your future demand and proactively allow real-time adjustments.

Insufficient technology

You need to integrate a demand planning tool into your business to automate your inventory forecasting efforts, but you should consider that not all tools have what it takes to deliver precision-based forecasts. Every business has specific needs that influence demand patterns. If your demand forecasting software doesn't account for all the factors that affect your company, you may end up forecasting on the basis of incomplete information.

Factors that affect your business:

• Seasonality
• Global events
• New trends and holidays
• Price changes
• Previous stockouts

The easiest way to tackle these challenges is to select the best forecasting software that works for your business. Make sure that you request a demo or trial to ensure the solution is relevant to your needs.

Manual process

To some organizations, automation is frightening because it implies they will lose absolute control over all aspects of the business. Instead of trusting the algorithm, they may feel like overriding the suggestions and making manual adjustments to the forecasts.

Manual demand planning methods are time-consuming, making it challenging to scale. Moreover, you increase the risk of human error when you interfere with the demand calculations.

The best way to counter this problem is to utilize automated forecasting to your advantage. Advanced demand forecasting techniques take away all the hard work from you and deliver precision-based predictions for your custom needs.

Fragmented solutions

Finding the right demand forecasting software that unifies all your inventory processes for all locations and channels can be complicated if you sell across multiple channels. This is one of the main reasons you may face difficulty during forecasting.

Using a fragmented method defeats the purpose of automated demand forecasting for your business. Siloing demand planning solutions instead of integrating your efforts across all channels can result in manual tasks, increased human error, and miscommunication.

The seamless way to resolve this challenge is to work with a demand forecasting solution provider capable of offering end-to-end visibility into your forecast requirements. This is what Avercast offers, enabling accurate forecasts across all channels of your supply chain. If these challenges seem familiar to your company, you may want to schedule a demo to see if Avercast is the right partner for you.

Avercast's Demand Forecasting Software empowers you to match your sales pace to your existing inventory, allowing you to avoid situations like stockouts and overstocking. We provide solutions that easily integrate with any ERP system and provide real-time, data-driven insights from multiple sources throughout your supply chain. To explore more about our products and services, schedule a demo today or talk to one of our experts.