Manufacturing companies find in Manufacturing Forecasting tools (also known by the acronym MF), solutions that can give visibility to the future along with numerous other benefits to the entire company, starting from the production planning department.
But whatis an MF solution, or Manufacturing Forecasting? It is a software designed specifically for the generation and management of production forecasts that are feasible, of quality and shared between the different company functions that use them for different purposes.
The improvements that MF brings to inventory
Accurate forecasts and a correctly set planning system thanks to an MF solution, ensure that companies have adequate inventory levels. In fact, through improvements in forecasts, companies often manage to reduce inventory levels; this also means reducing the risk of obsolescence, boasting more efficient warehouse operations, having fewer damaged goods, etc. In any case, one of the objectives of Manufacturing Forecasting is to ensure that inventory levels are adequate.
The effects of the forecast on customer service
Sometimes better forecasts highlight the need for higher (or in any case more adequate) inventory levels, which will lead to greater demand satisfaction and therefore customer satisfaction. The goal in any case is to have the right inventory levels, whether the inventories are higher or lower. One advice we give to companies is not to immediately move to higher inventory levels but to check that other factors (such as shorter production times) cannot produce the same effects on the end customer that greater inventories would bring.
Better operations thanks to MF
Better forecasts also help improve capacity planning. The spaces used for warehousing, production equipment, workforce levels, and future needs for facilities and equipment are some of the ways a company helps executives prepare for success. All these capacity constraints are expensive and can be quite difficult to modify but allow companies to adapt production departments in time, both in terms of materials and personnel, in order to maximize effectiveness.
Benefits for sales and marketing, from MF
In addition to the aforementioned advantages, good forecasts and analysis facilitate the launch of new products. Conversely, a lack of reliable analytics and data can doom a new product, or result in significant revenue losses and unhappy customers. On top of that, proper analysis provides detailed insights into evolving trends, product mix, and product lifecycle.
Improvements for the purchasing department
Quality forecasts also improve relationships with suppliers. By communicating a realistic purchase plan to your suppliers, they also benefit from the same benefits and improvements listed above. Giving suppliers more precise and punctual requests, avoiding sudden changes and orders at the last moment, makes them happier with the relationship, more collaborative and open. In addition, for all the same reasons stated above, the supplier will be more efficient (lower costs) and will want more than ever to have customers like you.
The MF, a useful tool for company management
Before hiring new resources or buying new machinery, it is good to optimize what you have available and use it in the best way. A good practice is to measure the accuracy of current and past forecasts, inventory levels, service levels, etc. and then improve those aspects.
Source: Institute of Business Forecasting & Planning
Today you can improve your MF process
Getting the benefits that come from using a Manufacturing Forecasting solution today is possible and highly recommended. In fact, more and more manufacturing companies are implementing these software solutions in their Supply Chain Management processes to achieve a modern and efficient production organisation. Find out how to get the right service level and inventory levels maximized for yourself, contact a Manufacturing Forecasting expert and ask them your questions.