Empowering CPG companies with Demand Forecasting software
In the consumer-packaged goods (CPG) industry, the ability to precisely predict demand is a must, and that’s where demand forecasting software comes into play.
As consumer behaviors shift and trends change, CPG companies’ need for accuracy in volume forecasts only increases. This is because companies have less room for mistakes and are dealing with changing workforce capabilities, with limited people capable of analyzing data using methods like spreadsheets and legacy tools.
The challenge lies in the critical need for precise forecasts at the banner and product levels. Commercial teams find themselves compelled to reconsider their volume-to-value strategies and engage in commercial activities with less confidence in their forecasts. The explosion of data sources, combined with manual analysis which is prone to human biases and constrained data cleansing, further compounds the intricacies of the demand forecasting process.
The challenges of forecasting for CPG companies
One of the primary challenges facing CPG is the shift from a focus on volume-driven strategies to those centered on creating value. This requires consistent delivery of accurate forecasts, especially at the granular levels of individual sales banners and specific products. With legacy tools, creating a forecast with this level of detail is too labour intensive, leading organizations to choose to predict with less granularity. However, this compromise is not without its hurdles, as the reliability of forecasts tends to decrease.
A significant contributor to this challenge is the proliferation of data sources in today’s digital age. With data pouring in from various channels and platforms, demand forecasting has become a more intricate process. The sheer volume of data can be overwhelming, making it difficult for teams to extract meaningful insights and make accurate predictions.
Relying on manual analysis further compounds these challenges. When humans are tasked with analyzing vast datasets, they are susceptible to biases and subjectivity, which can skew the accuracy of forecasts. Additionally, the manual cleansing of data to ensure its accuracy and consistency is a labor-intensive process that is also prone to human error.
Understanding demand forecasting software: A simple approach
Demand forecasting software is a valuable ally that simplifies processes for CPG companies. It gathers data from the past, such as which products sold well and when, and combines it with current information. Then, using smart, preferably learning, algorithms, it allows companies to predict how much of a given product will be needed in the future. This results in better planning and decisions that lead to success.
Demand forecasting software provides CPG companies with a clear view of their future product demands. It takes into account both historical sales patterns and external factors that might affect demand, offering a comprehensive perspective. This holistic view empowers companies to anticipate market trends, respond to changes swiftly, and allocate resources efficiently. The software acts as a compass, guiding them through the often turbulent seas of consumer preferences and market dynamics.
How demand forecasting software helps CPG companies
- Accurate Predictions: Consumer behavior is ever-changing, and trends can shift quickly. Demand forecasting software equips companies with the ability to predict future demand even during these fluctuations. Some software can create accurate predictions at the lowest level of detail, without requiring additional effort from demand planning teams. This empowers them to make intelligent decisions based on reliable information.
- Saving Time and Effort: Demand forecasting software takes on the heavy lifting. It automatically gathers data from various sources and compiles it, sparing teams the manual drudgery of data consolidation. This allows teams to channel their efforts into more crucial tasks, such as deriving meaningful insights from the data. Sophisticated AI models play a pivotal role in translating the available data sources into baseline predictions, enhancing the accuracy and reliability of the forecasts.
- Bringing Teams Together: Instead of different teams having varying predictions, the software fosters unity by providing everyone with the same information. This not only enhances teamwork but also leads to more informed and coherent decision-making.
- Customized Information: Different teams have distinct information needs, often varying in their required level of granularity. Demand forecasting software allows tailoring of its output to meet the specific requirements of each team, ensuring that the right data, whether at a high-level overview or a more detailed granular level, is provided to the right people. This customization facilitates better decision-making across the organization.
- Smart Promotions: While it may not always be the primary function of demand forecasting software, it often complements trade promotion management (TPM) as an add-on. However, having accurate baseline forecasts from demand software to fuel TPM significantly enhances promotion optimization. This software goes beyond forecasting; it actively contributes to promotion planning by recommending the timing and extent of product promotions. This guidance empowers companies to fine-tune their sales strategies, ensuring maximum effectiveness in their promotional efforts.
- Easy Product Changes: If a company decides to alter its product lineup, the software simplifies the process. It manages the transition seamlessly, ensuring a smooth changeover with minimal confusion.
Visualfabriq: Transforming CPG demand forecasting
Visualfabriq’s Demand Forecast Master stands out in the world of demand forecasting software. By offering reliable baseline forecasts at the most detailed levels of product and account hierarchy, it empowers demand planners with actionable insights. The integration of AI models ensures that forecasts remain accurate even in the face of changing market dynamics. This is especially important in the CPG industry, where shifts in consumer behavior and trends can have a significant impact on demand.
Visualfabriq’s solution enables different teams to work together, fostering collaboration, and promoting alignment across various departments. By providing a single source of truth for demand forecasts, the potential for confusion or discrepancies is minimized, creating greater confidence in the decision-making process. This unified approach ultimately facilitates the organization’s pursuit of predictable, long-term growth in both revenue and profit, all while maximizing operational efficiency.
Unlocking the power of AI for better demand forecasting
The heart of Visualfabriq’s demand forecasting software lies in its advanced AI capabilities. Unlike legacy tools that heavily rely on manual interpretation of historical data alone, AI can take a wider range of factors into account. These can include seasonality, external events like holidays or weather changes, and even social media trends. By analyzing these variables, AI-powered demand forecasting software provides a more comprehensive and accurate prediction of future demand.
AI removes the burden of manual data analysis and calculations. This means demand planners can focus on interpreting the results and making strategic decisions based on the insights provided by the software. It’s like having a digital assistant that handles the complex number crunching, leaving room for human expertise to shine.
Visualfabriq’s demand forecasting software is a powerful tool that empowers CPG companies to navigate the complexities of predicting demand. With its user-friendly approach and AI-driven accuracy, it transforms the way teams work together and makes informed decisions. Visualfabriq’s Demand Forecast Master empowers CPG companies to achieve better results, enhancing their adaptability, efficiency, and responsiveness in a rapidly evolving market. As the CPG landscape evolves, embracing demand forecasting software is an essential step toward achieving sustainable growth and success.
Book a demo now to learn more about Visualfabriq’s Demand Forecasting solution and pave the way to predictable, long-term growth in revenue and profit with optimal efficiency.