Businesses complexity is growing, driven by multichannel marketing, the growing influence of demand shaping (media, promotions, new product introductions), and the impact of internet buying behaviour. Yet, surrounded by an explosion of valuable new data, most companies have no way to take advantage of it. They are still using approaches based on cumbersome old algorithms and aggregated sales histories.

These systems cannot easily identify the demand signal and don’t solve the difficult problem of measuring the impact of external stimuli on baseline demand. They are producing disappointing results, significant forecast errors, and manually intensive processes leading to poor planner productivity.

The good news is that a data-driven approach using more intelligent software is readily available. And it has been shown to achieve big improvements not only in forecast accuracy, but also in demand visibility and level of forecast detail. Both translate directly into improved service levels and inventory efficiencies, particularly for “long tail” items. You don’t just get a more accurate forecast, you get a better plan.

SO99+ has embedded technology in its forecasting solution to solve problems that planners face every day. Rather than a “pick best” approach, we utilise a far more accurate self-adaptive demand forecasting algorithm that creates a reliable baseline. Machine learning can adjust the baseline by identifying the effect of stimuli and demand indicators at a detailed channel level. This “demand modelling” approach analyses all the relevant variables and the complex interactions among them in a highly automated fashion.

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For most businesses, the “long tail” is growing. Read Mastering the Long Tail & Intermittent Demand.

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Excellent customer service levels up to 99+ percent are now achievable, find out how in our Executive brief, Service Level Excellence.

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Improvements in forecasting are most dramatic when there is a fundamental change in the approach to forecasting.

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