Demand Forecasting has always been a crucial technique for companies in order to predict future situations, helping on inventory and production issues and to set up prices. The problem with demand forecasting has always been the same: you would never be able to have a certain answer, as you are predicting future scenarios.
However, current advances in technology and the progression of AI, have enabled companies to raise the percentage of this forecast to unprecedented numbers (over 90%). Although this is an important improvement, the greatest change isn’t the raise of the percentage that comes from the possibility to analyze much more factors than before but on the possibility to know the exact percentage of preciseness of that forecast, making companies able to know the exact possibility of a forecast to be correct and knowing how much to depend on it.
How has technology improved predictions so much?
Traditionally forecasting was done manually by companies, just by taking a clever guess over the historial sales, this wasn’t a forecast, but a guess. Nowadays the data obtained by companies is much larger, and this data can be stored and used in thousands of different ways obtaining companies great actionable insights.
The unification of huge sizes of information brought up a new problem: people where unable to read it and create insights from it in an efficient way. So Artificial Intelligence was created with the ability to read that information and simplify it for those teams. The use of AI over data enables precise predictions, and also the preciseness of those predictions. This preciseness would depend on the amount of data and the quality of it. For a company to become Data-driven it is crucial to be able to store and use wisely every single piece of data available.
Why is Demand Forecasting so useful?
1. Inventory and production efficiency boost
Stock issues have always been a problem for retail companies, as we have seen before demand forecasting has been done for many years, but in an unaccurate way. From now on, this could change radically as AI is enabling automated forecasting, which would help solving stock problems. With AI companies would be able to predict the amount of sells for each product to control their inventory and production as ever imagined, boosting their efficiency and saving large amounts of capital.
2. Setting up prices
Setting up prices has always been a complicated task for companies as it is not only a matter of trying to balance your numbers, it is fundamental to understand the demand of a product in order to set up prices, depending on the channel’s and product’s demand. This could be done with a demand forecast driven by data and AI.
Demand forecasting is another one of FLYDE’s possibilities
This solutions seem quite far away for medium companies as most of them tend to not be Data-Driven as big multinationals are. But there has been a radical change in the market, the entrance of FLYDE the Intelligent CDP easy-to-use, makes this technology approachable by any company (sector or size), and, most important, each team could have the control over the action driven by this platform.
FLYDE gives the possibility to companies to unify all of their customers data to exploit it in thousands of different ways. One of them is the Demand Forecasting which could be done through channels, products, product categories, or even by earnings. This different categories also give the possibility to be mixed within them to make as we have seen before the most precise forecast of the demand possible.
Do you want your company to move on to the next level? A CDP is the key tool that will allow you to maximise the potential of your data and grow your business. Working like the big multinationals in the market, which already have this type of software, and having control over all your data is now very simple.
Moreover, if you do not have IT or Data Scientist teams, this tool will allow you to outsource this function. And if you have them but want to reduce their workload and give more autonomy to your marketing and business teams when it comes to working with data, implementing an easy-to-use CDP would be the best option for your company. It will allow any single member of your company to use it, as this softwares are prepared for them.
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