Forecasting Benefits all Areas of a Company: The Distribution Center

by Jackie Biallas

Demand planning and forecasting benefits all areas of a company.  It creates efficiencies throughout a company and enables businesses to work smarter.  In order to be successful, forecasting must be a collaborative effort between all areas of a company.  One area that benefits greatly from good forecasts is the Distribution Center.


One of the main benefits of good forecasting is improved receipt flow.  The goal of forecasting is to achieve inventory optimization – having the right inventory, at the right time, in the right amounts.  When the inventory is optimized, receipt flow improves.  This benefits the Distribution Center greatly.  The Distribution Center will not have to house an overstock of inventory, which takes up space and often wastes time and money, as it often has to be moved more than once. Inventory carrying costs are greatly reduced when a forecasting system is in place.


A great forecasting system will enable the Distribution Center to plan their staffing needs with more efficiency.  The forecasts will help determine the demand for the products, which also determines inventory receipt needs.  Using this information, the Distribution Center can plan staffing needed for both incoming Receipts and outbound Shipments.  Improved workforce scheduling saves the company money.


A forecasting system will enable a company to determine its best sellers.  By identifying which products will have the greatest unit volume, they can place these items closest to the shipping stations.  This will save the Distribution Center workers steps, decreasing the time it takes to fill each order and increasing efficiency.


Just as the Forecasts produce great benefits to the Distribution Center, the Distribution Center provides extremely valuable information for the Demand Planners.  Effective workforce training is critical to Forecasting and Demand Planning.  Inventory counts must be accurate in order to avoid surprise stockouts or potential overstocks.  This means workers have to be trained to properly stock the inventory when it is received and pick orders correctly when shipping.  Routine inventory counts must be done to ensure the inventory levels are accurate and to catch any discrepancies before they become bigger problems.


The various departments within a company often work in siloes, with one department not talking to another.  A collaborative forecasting process encourages departments to share knowledge with one another.  The Distribution Center can greatly benefit by being informed of upcoming promotions or when sales trends for particular items are changing, for example.


When the Distribution Center and Planning work together, they gain incredible amounts of efficiency and accuracy – enabling both departments to more easily achieve their goals.

For more information about how forecasting can help your business become more efficient and work smarter, contact the industry experts at SAFIO Solutions.