5 W’s of Demand Forecasting

If you’ve ever taken an English class, your teacher might’ve taught you about the “5 W’s.” These are: who, what, when, where, and why. The hope is that touching on each of these W’s will cover an entire topic. If you can understand the 5 W’s of demand forecasting software, you’ll want to get your hands on some before you can even finish reading this article.

At first, demand forecasting software can seem like a daunting topic. There are many different aspects of demand forecasting software, so let’s break it down so it doesn’t appear to be such a complicated tool.

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WHO

“Who even uses a demand forecasting system?” “Do I even need to think about it?” These might be some of your initial thoughts regarding demand forecasting software.

Do you own a business? Do you sell a product or service? If you answered yes to either of those questions, it’s a good idea to keep reading.

Demand forecasting software is used in many industries, including retail, food & beverage, automotive, travel & hospitality, and more. Implementing this tool has brought improvements to each of these areas. Some have saved millions, others have freed up time and space, etc.

WHAT

So, what is it? Demand forecasting is the process of predicting what future consumer demand will be. This is done using demand forecasting software. With quantitative and qualitative forecasting methods, the software inputs a lot of different data. This data could be past sales, employee hours, seasonal trends, and more. It’s then used in the process of forecasting. Forecasts are created that show the predicted levels of demand. They can cover different periods of time.

Having a greater understanding of what consumer demand will be allows you to adequately prepare. You can have accurate levels of inventory which has many positive ripple effects. Learn more about the benefits of retail demand forecasting software in the “WHY” section of this article.

WHEN

The hope is always that demand is coming, so it’s a good idea to be prepared as soon as you can be. Demand is what keeps your company afloat and learning to handle it in the most efficient way possible will allow you to remain afloat. Implementing a demand forecasting system is a sure way to improve your company’s operations, so the sooner the better.

Stay ahead of the demand and get a grip on your inventory by using demand forecasting software immediately.

WHERE

There are many industries that use demand forecasting software and reap major benefits. Let’s look at some specific success stories.

A grocery store wanted to have a better awareness of their inventory, so they turned to a retail demand forecasting software. This system looked at their main product categories: candy, alcohol, dairy, tobacco, and snacks. Forecasts were created and then reviewed to make appropriate plans regarding inventory. In the end, rather than losing money to overstock of perishable inventory, the company ended up saving millions of dollars.
There was an alcohol brand that was mostly relying on historical data to plan for their future demand. When they started to use a demand forecasting software, they were able to stop over producing and have a clear view of what inventory they needed to produce and keep in stock. They have ended up saving $9 million each year!
An electronic company was hoping to release a new product, and of course they wanted it to be a success when it hit the market. Rather than depending on just their typical ways of making their best guesses and relying on research, they decided to go with demand forecasting software. This allowed them to recognize the areas that weren’t doing as well, and they got out of those markets. They saw major growth in their success.
These are just a few examples of companies that have benefited greatly from implementing accurate demand forecasting software. Your company could be next!

WHY

You’ll see many benefits if you choose to use a demand forecasting system.

Inventory – you’ll be able to have accurate amounts of inventory. This will result in an avoidance of stockout and overstock situations. Your business revolves around the buying and selling of goods or services. Having more correct inventory levels will result in more success as well.
Warehouse – as you know, inventory is typically stored in a warehouse. Having precise amounts of inventory will help your warehouse operations to be more efficient. A few of these efficient improvements are accurate orders, quicker shipments, and saved time.
Finances – avoiding stockouts, overstocks, and improving warehouse management will save you money! What more could you hope for? While demand forecasting software does come with a price tag, in the long run it’ll be a huge financial benefit to your company.

Well, now you know the 5 W’s of demand forecasting software. If you want to know more, we would love to talk with you. Find the best demand forecasting system for your business needs.