Steps to Improve Demand Forecasting

2/15/19 2:52 PM

Demand forecasting pertains to relying on data given to you, whether it be historical or real-time, and enables you to utilize this data to make decisions for production. There are various softwares out there that are capable of utilizing algorithms and giving you some sort of an idea of what your potential demand may be. Steps to Improve Demand Forecasting Your data will only be as good as you interpret it, which is why it is important to understand the strengths and limitations of it. With that being said, there are four steps/concepts that can aid in driving forecast results. Therefore, here are the four steps you can take to better address your demand forecasting.

Four Steps to Improve Demand Forecasting

The four steps to improve demand forecasting include the following:

  • Preparing for Data Analysis - However you roll up data for forecasting will impact accuracy. Managers have a tendency to roll up a rather significant number of transactions and need to analyze these transactions at a much higher level to develop a concise understanding of sales activities and trends. They will usually want to create a number of dimensions, which include time, place, product, supplier, and organization. Managers will then want to summarize by several of these dimensions simultaneously.
  • Measuring Data Accuracy - Utilizing historical data is the best way to understand future demand. There are various models available out there to analyze sales history, from averages to advanced regression methods that adequately measure trends, seasonality, and cyclic characteristics of data. Before deciding on a model, it is important to understand if sales history is the same as demand for a particular product.
  • Understanding Order Fulfillment - With most businesses, there will be situations where there are stock shortages but sales will be fulfilled through alternate channels, such as expedited orders from a different location. While this will please the customer, it can create confusion within the demand forecast due to data collection not easily being traced back to you. If this was to happen, the facility needs to record demand at the alternate facility.
  • Managing Data Spikes - Most businesses will see spikes in their sales, which may be due to data errors or they may even sometimes reflect real sales. Spikes tend to pull demand distribution in their direction, which can skew inventory planning. This is why it is important to understand traditional forecasting and spikes should be researched separately. This is to understand if they are trends or if it just a one time event.

A software that can accurately predict demand forecasting is PlanetTogether’s Advanced Planning and Scheduling software (APS). This software can utilize demand forecasting and incorporate it with production planning and scheduling, which then allows you to choose the most advantageous production schedule for your manufacturing operation.

Advanced Planning and Scheduling Software  

Advanced Planning and Scheduling (APS) software has become a must for modern-day manufacturing operations due to customer demand for increased product mix and fast delivery combined with downward cost pressures. APS can be quickly integrated with a ERP/MRP software to fill gaps where these system lack planning and scheduling flexibility and accuracy. Advanced Planning and Scheduling (APS) helps planners save time while providing greater agility in updating ever-changing priorities, production schedules, and inventory plans.

    • Create optimized schedules balancing production efficiency and delivery performance
    • Maximize output on bottleneck resources to increase revenue
    • Synchronize supply with demand to reduce inventories
    • Provide company-wide visibility to capacity
    • Enable scenario data-driven decision making


Implementation of Advanced Planning and Scheduling (APS) software will take your manufacturing operations to the next level of production efficiency, taking advantage of the operational data you already have in your ERP.

Related Capacity Planning Video

 APS Resources

Topics: Demand Forecasting


Download the APS Shootout Results


PlanetTogether APS: A GPS System for your Supply Chain - See Video

Recent Posts

Posts by Topic

see all
Download Free eBook
Download Free APS Implementation Guide
Download Free ERP Performance Review