Advanced Demand Forecasting
Understanding the impacts internal and external factors have on-demand allows organizations to optimize forecasting and build responsive and more nuanced sales strategies
Forecast demand more accurately
While noting that many organizations are not yet leveraging advanced analytics in forecasting, a CFO.com Special Report states that 74% of companies responding to a 2018 survey produced more accurate forecasts when using sales planning analytics. They went on to note these organizations also reported a higher percentage of sales representatives meeting their quota and a higher rate of opportunities won.
Organizations can now fine-tune forecasts and optimize supply chain and business operations by leveraging machine learning (ML) and big data analytics in demand and sales forecasting.
Advanced Demand Forecasting from Neal Analytics helps provide a clear picture of where demand is heading and individual site and even SKU level by leveraging data analytics and state of the art machine learning techniques. The solution achieves this by analyzing external and internal factors that can influence demand, including how multiple factors can influence each other’s impact on demand. Understanding what factors are driving demand and the degree to which they impact it enables organizations to optimize their supply chain and business operations as well as develop business strategies to maximize potential sales.
Understand demand drivers
Understanding demand drivers allows organizations to drill down and better understand how different factors might impact different demographics and customer segments.
Advanced Demand Forecasting generates forecasting reports leveraging a form of Autoregressive Integrated Moving Average (ARIMA) that includes exogenous factors (ARIMAX) or traditional statistical regression techniques. The solution then uses residual regression analysis to determine what factors are driving demand beyond seasonal changes. Identifying these factors enables organizations to understand what drives demand on a macro level and can be used to drill down into individual sites with down-to-the-hour and SKU-specific granularity. This granularity allows organizations to drill down to forecast for segments based on customers, products, or other existing company structures.
Advanced Demand Forecasting also enables organizations to understand:
- How incremental variances in a given individual factor impacts demand
- How variances in one factor can impact another factor (e.g., the extent to which increasing sales staff numbers reduces customer wait times)
- Which factors may have different impacts in different geographies or markets
Optimize business operations
The level of granularity offered by Advanced Demand Forecasting enables organizations to optimize their business practices, including supply chain and regional or in-store operations. By understanding demand drivers and how they affect different stores or sites around the country or world, organizations can fine-tune their supply chain to better support sites that see higher demand. Doing this helps drive sales by ensuring demand is met and reduced waste by avoiding overstocked facilities with lower demand.
It can also support more efficient in-store operations, such as focusing on specific activities shown to generate more sales or even the amount of staff required on the sales floor to achieve the optimal customer wait time. These changes maximize sales without overstaffing the store or spending resources on activities that aren’t adding value.
Improving this kind of efficiency allows organizations to intervene or modify business operations based on trends in demand factors, as well as identify over- or under-performing sites and the underlying reasons for the high/low performance. Changing business operations enables organizations to maximize the impact of every SG&A dollar spent by focusing on the specific sites and factors that can drive the highest impact.
Strategize sales plans
Understanding how factors impact each other and drive demand also enables organizations to build sales strategies to maximize potential sales. Strategies include both annual plans based on common trends and historical data (including sales data and how variations in factors have impacted demand in the past) and near-term tuning using high confidence forecasts or predictions for the near future.
Weather forecasts and social media analyses, for example, work great for recognizing and acting on limited-time opportunities. As an example, weather data may indicate an upcoming weather storm. Advanced Demand Forecasting can identify this, measure the potential impact on the demand for umbrellas and raincoats, and forecast how it’ll impact average customer wait times. In this situation, an organization can check to see whether the extended customer wait time harms sales. From there, they can decide how to proceed, whether they choose to reduce staff and save costs or try to mitigate the negative impact wait times may have on demand. If the latter, Advanced Demand Forecasting enables the organization to fine-tune tactics to alleviate wait times, whether through increased sales personnel, an in-store promotion, a combination of the two, or some other tactic altogether.
Organizations lack timely data to make optimization decisions when it matters. Advanced Demand Forecasting delivers a great deal more flexibility to adapt and strategize based on sudden or unexpected events. While rigid, traditional forecasting models make ad hoc adjustments based on significant events difficult, Neal Analytics can rapidly tailor Advanced Demand Forecasting to account for new demand factors.
Neal Analytics has experience delivering unique solutions for unique business challenges across virtually all industries. Advanced Demand Forecasting has been designed to be quickly deployed and highly customizable based on an organization’s unique business needs and challenges, including requirements for multiple forecast timeframes and specialized models for specific segments.
Leveraging a team of seasoned business consultants and data scientists, Neal Analytics can also help organizations start forecasting more accurately by:
- Working with customers to understand their exact forecasting needs and challenges
- Leveraging industry best practices to ensure forecasting accuracy while maintaining data and security compliance standards
- Offering flexible engagement models that enable Neal to support organizations however they need
Neal Analytics is also an award-winning Microsoft Gold Partner, reflecting our deep expertise in migrating data and apps to Azure and other cloud platforms.