Amongst sales people, one of the least popular but most important planning activities is filling out forecast spreadsheets so that production resources can be allocated to meet the demand for different products in each market.
However figures from industry studies show that despite the significant effort and time that goes into creating and then merging together all these separate spreadsheets, the demand that they predict is often very different to what customers actually want.
As a result, production planners tend to mistrust sales forecasts and fall back onto repetitive production schedules, which often means they cannot meet all of the customer demand at the time it is needed. At the same time, inventory management lacks the inputs needed to keep the right products in the right places at the right times.
A smarter approach to sales forecasting
I-Plan provides a very different approach to sales forecasting. It delivers outstanding accuracy and easeof use, by combining the best aspects of collaboration with proven statistical methods.
At the start of each forecasting period, I-Plan examines detailed sales records from the last few years,looking for patterns, trends and seasonality in each product group. It then uses sophisticated algorithms to generate detailed initial forecasts for each sales person.
Using a simple, web-based tool, sales people review their proposed forecasts and apply their knowledge of customers, markets and industry events to adjust figures up or down appropriately. Once they are happy with the forecast, their sales managers and then regional directors can make any other adjustments and change allocations based on their experience and strategic aims.
Because I-Plan has been designed from the outset for process industries, it makes this ‘top-down, bottom-up, middle-out’ demand planning work exceptionally well for everyone who uses it. This is in contrast to the cross industry ERP systems which require extensive customization to work even passably well in this kind of industry.
Experience has shown that this approach with I-Plan is not only faster and easier but also far more accurate at forecasting demand. In practice, it is giving planners enough confidence in sales forecasts to make significant changes to production outputs and inventory management strategies – resulting in a greatly improved capacity to deliver what their customers need.