How To Improve Your Company’s Inventory Demand Forecasting

Implementing inventory demand forecasting strategies and models can inform many of your company’s decisions, from what you ordered, what you stocked, and who is available to ensure the process goes smoothly. Intuition can only go so far as to predict what customers look for, and even the best sales teams can’t stay ahead of every trend. Here are some tips on how to improve your company’s inventory demand forecasting and set your business up for a more successful quarter.

Experiment With Forecasting Models

There are several forecasting models available to businesses, each effective in its own right. If the model your team relies on doesn’t feel right or isn’t producing accurate results, spending a few weeks trying other models may help. Though there is no one correct way to forecast demand, as each business, industry, and region is unique, understanding multiple strategies can help you adopt elements of each. You can then choose the best stock forecasting software (or even a combination of a couple) that seems successful and formulate a strategy able to serve your company.

Consider All Factors

Inventory demand forecasting requires a business to try to predict the future, which is inherently impossible. One thing that makes it so difficult is attempting to understand every element of why customers are looking to buy on any given day. Your team may benefit from taking a step back from their current strategy and thinking about the existence of each product on a broader scale. Thinking about seasonal demand factors, the ongoing advertising campaigns of the product, and even a product’s lifespan helps you create a more accurate strategy for the next order.

Rely on Metrics and Software

The people who do the day-to-day labor in warehouses and on the floor are undeniably an essential asset any business. However, to err is human, so putting the entire responsibility of inventory management on your team’s shoulders is bound to lead to dead stock or product shortages.

Understanding how to improve your company’s inventory demand forecasting, like many business changes, may not have immediately apparent results. Each strategy needs to be tweaked over time to be as beneficial and accurate as possible. However, by prioritizing demand forecasting now, you can set your business up on a more successful path for the future.