The Importance of Demand Forecasting in Supply Chain Management

Demand Forecasting has been used in various ways to optimize profits and reduce unnecessary production.  With accurate forecast models, a business can produce goods as needed.  This in-turn will reduce the need for warehousing space and allow for proper assessments of machinery needed to produce enough goods to meet market conditions. 

With the trend towards just-in-time supply chain systems demand forecasting plays a very important role in supply chain management.  Without accurate forecasts, businesses risk increases inventory, transportation, and administrative costs. 
If we measure the cost per square foot to maintain a certain inventory level and add in the working capital needed to fund inventory that could otherwise be kept in an interest barring account, inventory costs are significant.
Demand forecasting will give insights to make better business decisions and will help your organization become a model for operational excellence.
For more information about demand forecasting please contact our supply chain management consultants at operationconsultinggroup.com