Understandably many people are looking forward to the end of 2020 and the challenges it brought. Looking forward, there is still time to make significant improvement to your 2021 plans with a planning and forecasting process to ensure company goals are met! With all the changes 2020 has brought, it is necessary to review and evaluate your current position and take steps now to adjust future plans that will set you up for a successful 2021.
Your demand has been adjusted, your supply chain has been disrupted, your lead times have changed-among the many changes and challenges that you might have experienced this year. While inventory is often the largest investment of a company, ensuring that it is optimized for best performance is most important and still possible. And a great forecasting system can help you do just that.
A planning and forecasting process will bring all your vital data together, define goals for the future, and then provide a roadmap to achieve these goals. In addition, a forecasting system provides many proven benefits for businesses: optimized cash flow, satisfied customers, minimized inventory costs, informed financial planning, increased ability to negotiate with vendors, and the ability to strategize sales plans. In fact, almost every department of the company benefits from a great planning and forecasting process. Yet, many businesses do not have one.
Benefits of a Planning and Forecasting Process:
- Fulfills Customer Needs on Time in a Cost-Effective Manner – The primary objective of a forecasting process is to ensure that consumer demand is satisfied as efficiently as possible. With the shifts in consumer behavior in 2020, cost-effective and timely fulfillment was certainly a challenge.
- Increases Turn and Cash Flow – Inventory needs are mapped out with a forecasting process. Businesses are able to save money because they can project the inventory they will need and when they will need it, thus not having to hold excess inventory. This gives businesses better cash flow, enabling them to invest in the most successful items.
- Provides a Roadmap for Financial Planning – Forecasts define the expected sales goals, inventory levels and profitability of a business. When trends deviate from the roadmap, actions can be taken to get back on track to achieving company goals. Forecasts help businesses anticipate change, reduce uncertainty and identify the best ways to achieve their goals
- Highlights Growth Opportunities and their Potential – An up-trending item or category is recognized very quickly. Demand can be re-projected and profitability maximized.
- Lowers Liabilities and Markdowns – With a forecasting process, items that are not selling up to their original forecast can be addressed early. Taking action early ensures that the most profit possible can be generated.
- Encourages Collaboration between All Departments – The forecasting process requires all departments work together. With more employees beginning to and continuing to work from home, effective collaboration proves more challenging yet still as important. Production, Distribution, Sales and Marketing, and Finance must all provide input into the Planning and Forecasting Process. Likewise, all departments will receive benefits by the information forecasts provide.
- Guides Scheduling of the Rest of the Company – Forecasts enable businesses to anticipate staffing and production needs.
- Provides Insights for New Product Development and Planning – Forecasts enable businesses to see changes in consumer demands and help answer why the marketplace is changing. With well-defined data, a business can determine the whitespace in a market and begin development on new products.
- Increases Knowledge of Market to Gain Competitive Advantage – Because a well-defined hierarchy brings clarity and well-planned forecasts provide a roadmap, companies can see changes to the marketplace quickly and gain valuable insights, giving them a competitive advantage.
The SAFIO Solutions forecasting software integrates a company’s data into a single comprehensive platform, with reports & dashboards, customized to meet our client’s unique needs. The forecasting process has already been defined & is included in the licensed application, resulting in reduced start up time and cost. This efficient process creates the vision and consistent reporting needed to improve forecasting, optimize inventory and make strategic decisions resulting in improved operational performance.
Ready to put 2020 behind you and focus on success in 2021?
For more information on how SAFIO Solutions can help your company plan for a successful 2021, contact the industry experts at SAFIO Solutions and request a demo!