Sales is the lifeline of any business. From the get-go supply chains have to be optimized to minimize waste and maximize profit from every sale. Unfortunately, this is often easier said than done.
Supply chain management can be compared to walking a tightrope – one mishap can lead to a complete collapse.
Fortunately, sales forecasting can come in to help pick up the slack when supply chains need a boost. So much so that companies with accurate sales forecasting are 10% more likely to see growth year on year.
Because it’s the most critical aspect of building and maintaining an efficient supply chain, it’s important to align the two strategies.
In a world that’s increasingly trying to reduce emissions and cut costs, quantifying needed resources ahead of time is vital to efficiently manage the supply chain process.
When using sales forecasts to manage resources, accuracy matters. A sales forecast that’s too high could lead to sizable write-offs in finished products and unusable materials, resulting in hefty discounting.
Equally, a forecast that’s too low means long periods where products are out of stock, leaving consumers no choice but to shop elsewhere.
Whether it’s physical resources – like materials or products – or additional staff, a sales forecast reveals what you’ll need to have in place to make your supply chain profitable.
Spur company growth
One of the primary growth factors for many organizations is how scalable they are and how quickly they react to market fluctuations.
Meeting demand isn’t easy, and neither is preparing for sudden increases. Companies still face many challenges, even in the face of what would appear to be guaranteed success.
Sales forecasting not only helps balance resources, but it helps you calculate what your profits are and how much expendable capital you invest in scalability.
With this information, businesses can develop conservative or ambitious fiscal plans that are well-sourced and founded in facts, not emotions.
Improve company morale
It’s no secret that efficient sales forecasting leads to a smoother sales process but businesses often underestimate its side benefits to its employees in supply chain roles.
Efficient sales forecasting means employees aren't burdened by unexpected delays, missed deadlines, and mitigating customer complaints.
Sales forecasting can also direct your staffing needs so shifts are never over- or under-staffed.
Improve customer service
As the adage goes, “if you don’t take care of your customers, somebody else will”. You can spend all the money in the world on the best customer service team, but if the core supply chain is in disarray, it will all be for nothing. Customers won’t be happy if the product they need is out-of-stock.
Customers want transparency from companies regarding what’s in stock – with over 40% demanding store-specific stock information. If this information is unavailable or inaccurate, your customers will quickly find their way to another seller.
Get it right first time
Understanding the true scope and potential of your business is paramount to proper resourcing. Sales forecasting helps get things off on the right foot.
Getting a forecast wrong happens. However, getting it wrong regularly or by a sizeable margin can be catastrophic.
Sudden increases in sales or demand at one end add cumulative costs further upstream. Depending on the suppliers and their contractual agreements, businesses can wind up absorbing the costs of unexpected surcharges as a result.
Because of the rigid nature of supply chains, forecasts can help reveal an impending change in demand so you can modify for purchasing, manufacturing schedules, hiring, and labor hours. The visibility provides you with the time to pivot to an alternative strategy before the customer discovers the mishap for themselves.
Want to learn more about how data from sales forecasts can improve supply chain management? It’s easier than you might think, if you engage the right experts.