Demand Forecasting Solutions

Optimise your Supply-Chain Logistics with Fully-Integrated Demand Planning

If you’re in the Fast Moving Consumer Goods (FMCG) sector, chances are you’re spending a fair amount of time trying to understand your customers. The business rules are deceptively simple – keep just enough product on the shelf to avoid a stockout, and you can maximise revenue without tying up your cash in inventory.

But, in these days of ‘disruptive’ technology, with traditional industries being decimated overnight by new retail channels and products, being slow to react to a customer mood shift can be fatal.

Demand Forecasting

Predicting the Future

So, how do you avoid becoming the proud owner of a warehouse full of obsolete stock?

Most companies follow the steps below, with varying degrees of automation:

Process Steps Output
1. Demand Forecasting Extrapolate the sales history for each outlet to give a base demand forecast. You might be making this more accurate by applying statistical analysis to this history with:

 

  • Seasonality Analysis
  • Product Clustering
  • Geographic Clustering
Unconstrained Demand
2. Demand Planning Now it’s time to factor in constraints to future sales, such as:

 

  • Outlet Refurbs
  • Supply Logistics (eg roadworks)
  • Product Ranging
Constrained Demand
3. Stock Allocation And finally, add on the effects of promotions and price changes to give the actual stock allocation for each outlet Stock Allocation

Unfortunately this all takes time – even if you have some statistical help on the first step, the second two are usually manual exercises. With this approach, you can only get the right answer faster if you employ a larger team of business analysts. And then you need more management to co-ordinate them all and check for mistakes in the manual process. The costs are starting to add up.


How can Cornerstone help?

Cornerstone’s Demand Forecasting solution leverages industry-leading software from IBM, bringing all three steps together and automating the process, incorporating:

  • SPSS, the market leading Predictive Analytics engine, to perform fast and accurate statistical modelling at the Demand Forecasting step
  • TM1 to collect, disseminate and consolidate Constraint and Promotion Planning. The flexible cube structure of TM1, combined with business user-friendly web interface, speeds up the demand planning process and improves accuracy
  • ERP integration – the Cornerstone Demand Forecasting solution communicates seamlessly with your ERP, removing most of the manual steps in the stock allocation process
  • Cognos Business Intelligence to provide real-time visuals and reporting of the demand planning process

Deploying Cornerstone’s Demand Forecasting solution will save you time and money in a key area of business operations, and will keep you one step ahead of the competition.

Cornerstone deployed this solution for Gordon & Gotch, Australia’s largest magazine distributor, and here’s what David Hogan, the Managing Director, had to say:

“The ability to forecast more accurately and complete the allocations process more efficiently puts us in a strong position with our clients – they were keen for us to develop the new system and we feel it’s a key differentiator for our business.

“The ability to gain deeper insight into sales and share that insight with clients via Cognos Business Intelligence helps us prove that distribution is about more than just efficiency – it’s about making the right operational decisions to boost sales and profitability.”

Gordon and Gotch

You can read the full case study here.

Demand forecasting is the analytical bridge between your customers and your products/services. If you’d like to see how your business can benefit from streamlined demand forecasting, call us at 1300 841 048 or contact us online for a free initial assessment.