Even though we are only just reaching the half way mark in the year, many businesses will already be looking ahead to what is needed for the busy Autumn/Winter period. During this time, many businesses can see vast increases in the volume of sales orders they are handling on a day-to-day basis and will need to ensure they have the right processes in place by this time to turn these orders around at a speed that keeps customers satisfied. However before these processes can even make a difference, companies need to make sure they have the necessary stock available in order to cater for the demand and recognise seasonal peaks and troughs in requirements for different products.
Although one of the most essential parts of any successful business, many companies will struggle to achieve accurate stock forecasting for these key periods within their calendar year. With many businesses importing goods from overseas suppliers with lead times of several months, it can be difficult for companies to ensure that the stock that they order now is what they need by the time the stock arrives later on in the year. As a result, companies often have to settle for unreliable estimates, trying to gauge how much stock is needed based on past experience, performance of similar items and simple gut feeling. By leaving this invaluable information to chance, companies will find themselves losing sales to competitors through stock shortfalls or reducing their profitability through overstocking, having wasted money on stock that will never be sold.
But is there a way for businesses to be much smarter with their stock forecasting?
By utilising historical sales data and having the right tools in place to make the most of the information that is presented, the answer is yes.
The problem is that most businesses will not have a system in place that is intuitive enough to automatically calculate what is needed, meaning businesses rely on staff manually gathering this information themselves. This process involves getting staff to sift back through previous sales history, combining the data from numerous unconnected systems, entering this into Excel and using the results to gain an insight into purchasing requirements. This is not only incredibly time-consuming, but with so many factors to consider such as supplier lead times, upcoming promotions, seasonal peaks and periods of no usage skewing data results, often after going through this process businesses are still left with forecasted figures that simply aren’t accurate. With accurate stock forecasting playing such a vital role in fulfilling customer demands, fully maximising sales opportunities and ensuring vital cash flow is not wasted overstocking, it is absolutely essential that businesses have a structured and precise way for purchasing staff to manage this effectively.
When it comes to forecasting, here at OrderWise we understand that each company requires their own tailored method of managing this, best suited to how they operate and the stock that they sell. With a range of forecasting methods available to meet even the most complex of purchasing requirements, OrderWise ensures every business using our software has the right stock, in the right quantities, in the right place and at the right time.
Within OrderWise, users are presented with a number of ways to calculate the minimum and maximum stock levels required: set quantities, constant usage, fixed usage and variable usage. With the Constant and Variable Usage methods, users can specify how many weeks’ worth of stock they wish to hold, take into account supplier lead times, specify a date range for OrderWise to look back over retrospectively and decide whether periods of no stock, no usage or no usage and no stock are taken into account in order to accurately calculate their required stock levels. With Variable Usage which is designed to help customers who will go through seasonal peaks, businesses can also decide how many years’ worth of history to use and what percentage factor of growth or decline to use when forecasting.
This information can then also be used to forecast into the future using the OrderWise To Purchase Report. Users simply set the forthcoming date as required and OrderWise will look at current stock, current demand, current purchase orders, supplier lead times and future usage requirements, minus any forward orders based on historic usage over the selected period. This provides a complete picture of expected requirements at the click of a button, informing users what needs to ordered, in what quantity to order and for when the stock is needed. Where long supplier lead times exist, this method of forecasting is nothing short of essential.
Account For Future Sales Orders With Forward Demand Forecasting
Needing to stock for future requirements that have no correlation to previous demand or usage? Not a problem as OrderWise Forward Demand Forecasting provides the ideal solution for businesses with temporary customer contracts supplying products over a fixed period of time or when gaining new customers and simply expecting an increase in demand on a range of stock items. This great feature allows users to specify a customer, the forecasted quantity for each period based on a chosen date along with the relevant stock location. This can then be repeated for each customer for which a user wishes to forecast demand for an item. Then when the Purchase Report is run, if this forecasted demand falls within the usage period(s) for the date range chosen, it will be picked up by the report and included in the list of stock to be purchased, with additional factors such as supplier lead times and order buffer times also taken into account. If a company deals with one off contract supply and does not want the stock used to skew future forecasting OrderWise provides this flexibility to handle this also.
With OrderWise, businesses are presented with an exceptional suite of forecasting and purchasing functionality that is flexible enough to be tailored to meet any company’s exact requirements. By using OrderWise to improve the accuracy and efficiency in how stock forecasting is calculated, businesses will have much greater control over their stock levels. This allows companies to ensure purchasing activities are streamlined, customer demands promptly met, cash flow effectively managed and sales always maximised.
Want to know how best to manage your stock forecasting? Why not arrange a tailored online demonstration with one of our business consultants today and see how OrderWise can help your business throughout 2015 and beyond. You can arrange a demo of OrderWise HERE.
For more information on OrderWise, you can download our brochures or watch our videos.
To discuss your requirements in more detail contact us today on 01522 704083.