When your actual shipment times aren’t matching the plan, it’s time to adjust the forecast.
There are several factors that can affect supply and demand, including:
- Major economic slowdowns or impacts
- Losing or gaining customers
- Sales promotions
- Non-recurring sales
- Selling off dead stock
Having your finger on the pulse of things happening within your organization will prepare you for these types of changes and the adjustments that should be made.
Obviously, economic fluctuations that affect the country as a whole will most likely affect your operations, as well. During a recession or an influx of stimulus payments, your demand may change, meaning the forecast should change with it.
Adding ten new customers or losing three will also affect your numbers. Keep open communication with your business development team so you can be prepared to scale up or down on your ordering. While it may be difficult to get hard data on these things, usually, a good conversation will produce enough for the supply chain team to steer the forecast to some degree.
Sales and seasonality play a large role in forecast adjustments. For instance, knowing when marketing is running a promotion will give you a good indicator of when to ramp up your inventory and when to go back to normal levels. Past promotions, on the other hand, may skew your data. When analyzing trends, you’ll want to have some background information on what may have been happening with promotions or launches during that time. If you base your forecast on large sale numbers due to a promotion that isn’t recurring, you may find yourself with excess inventory.
If you have varying seasonal lead times, you’ll also want to factor that into your forecast. The Chinese New Year is always going to be a huge holiday to plan around if you’re ordering from overseas.
If you’ve recently sold off a lot of dead stock, you won’t need to start rebuying. Ensuring everyone is on the same page will help to maintain consistent levels.
The bottom line is to stay in touch with each department so you know about any new or lost customers, promotions, and industry trends. Keeping tabs on what is happening in the organization as a whole will help keep your inventory numbers steady and on track.