Testing times for everybody mean we are trying more and more ways to resolve problems. In our business we are constantly being asked by pressurised business owners and managers, how can I handle such erratic demand?, yet satisfy demand. I must reduce Stock, I can’t afford to hold it yet I must work with powerful suppliers otherwise they won’t give me stock when needed. Big problem and the answer is. DO the maths!
What do we mean? well maths includes statistics and elementary statists could be the answer to your problem. Sales forecasting software from MXI UK such as Forecast PRO examines trends in your sales, stock, purchasing histories. Statistics forecasting methodologies such exponential smoothing helps business everyday carry less stock meet weaker demand as it arises. The technical explanation is that statistical smoothing techniques common to sales forecasting software such as Forecast PRO weights recent sales, stock time series history (i.e. the financial crises & recession). In other words, recent observations are given slightly more weight in the forecast than the older observations. This is a very popular scheme to produce a smoothed Time Series.
Thats why we developed the very popular MXI free forecast review session. Send us your data and we will forecast it free online free. (UK/IRL) only:
We help companies and organisation to use Forecast PRO sales forecasting software exponential smoothing to detect seasonal changes in data by ignoring the irrelevant fluctuations irrelevant. Further we can select other methods such Holt Winters, simple trend-line or same as last year plus or minus a delta (if required), incremental growth.
Of course we encourage users to intervene directly themselves using the human experience and interaction to finesse the forecast. Sales forecasting software can’t be aware of increased advertising, reduced marketing, promotions, end of line, new product launches, etc. Sales forecasting software builds greater supply chain accuracy into the forecast. Results always need intepretation, human intervention and finessing.
Our Excel challenge works with organisation everyday to demonstrate how we can speed up forecasting, sales and operations planning, demand management. Check out the excel challenge for yourself to see how you can start moving in the right direction.
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June 2010-UK Retail rise again. Here are 2 Tips to take advantage Sales are rising in different retail sectors except food, In the UK sales forecasting software Forecast PRO is helping sales forecastors drive British economic growth whilst reducing on hand stock and finance costs.
For June the figures were UK retail sales rose 1.2% in comparison to June ‘09, when sales had picked up 1.4%. This June was slightly less hot, but sunny for most of the month. On a total basis, sales were up 3.4% against a 3.2% increase in June 2009.
As budgeting and forecast experts we are often asked what sales forecasting software to select to improve forecasting accuracy.
These business intelligence improvements reduce the cost of the budgeting and forecasting cycle. Any improvement here flows into in the Supply Chain, reducing logistics, packaging, warehousing, marketing and finance costs just for starters.
Seasonality and Trending is usually a big issue for forecasting and planning as it plays a very big role Supply Chain planning. The large ERP systems just have enough insight or flexibility to deliver the forecasting accuracy required. We constantly come across companies who are working with 40 - 60% forecasting accuracy where they need 70% plus accuracy at least.
Remember Statistics from the school days well could save your bacon now. Using Statistics on your sales histories provides valuable insights into your forecasting requirements. BIG ERP tends to give a simple average for the last 3 months Stock, Sales or Purchasing figures and projects forward on that basis. No Science, no business knowledge, no intuition, no exponential smoothing, just cut and paste. A waste of money. Now Stats just got a bit more interesting.
TIP – Get 2 years of data (SKU, Category, Product, Regional level) and find the trend in that. You can use Statistical methodologies to select the most appropriate sales forecasting methodology to forecast sales, tax revenue, passenger numbers. Track the impact of weather and season etc.
TIP – Avoid the hassle and expense of the above learning invest in sale forecasting software. Send us your data for forecasting
For example we use Forecast PRO sales forecasting software exponential smoothing to detect seasonal changes in data by ignoring the irrelevant fluctuations irrelevant. Forecast PRO exponential smoothing (unlike moving averages smoothing) older data is given progressively-less relative weight (importance) whereas newer data is given progressively-greater weight.
Also called averaging, it is employed in making short-term forecasts. Our Excel challenge works with organisation everyday to demonstrate how we can speed up forecasting, sales and operations planning, demand management. Check out the excel challenge for yourself to see how you can start moving in the right direction.
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Contact MXI Software
Forecast PRO sales forecasting software will dramatically improve your sales forecasting accuracy, track historical forecasts and produce variance reports for better business intelligence that will drive improvement in your enterprise forecasting process.
Four reasons to track forecast accuracy
1. Improving your forecasting process requires the ability to track accuracy.
Sales Forecasting should be viewed as a continuous improvement process. Your forecasting team should be constantly striving to improve the forecasting process and forecast accuracy.
For example, many organizations generate baseline forecasts using statistical approaches and then make adjustments personally based on local knowledge such as an upcoming promotion. Organisations that track the accuracy of both the statistical and adjusted forecasts learn where the adjustments improve the forecasts and where they make them worse. This knowledge allows them to focus their time and attention on the items where the adjustments are adding value.
2. Tracking accuracy provides insight into expected performance.
A forecast is more than a number. To use a forecast effectively you need an understanding of the expected accuracy.
Within-sample statistics and confidence limits provide some insight into expected accuracy; however, they almost always underestimate the actual (out-of-sample) forecasting error. This is due to the fact that the parameters of a statistical model are selected to minimize the fitted error over the historic data. The parameters are thus adapted to the historic data, and reflect any of its peculiarities. Put another way, the model is optimized for the past—not for the future.
As part of our drive to help companies improve forecasting, we are offering a free forecast: Just sent your data in to us
3. Tracking accuracy allows you to benchmark your forecasts.
If you are lucky enough to be in an industry with published statistics on forecast accuracy, comparing your accuracy to these benchmarks provides insight into your forecasting effectiveness. If industry benchmarks are not available (usually the case), periodically benchmarking your current forecast accuracy against your earlier forecast accuracy allows you to measure your improvement.
4. Monitoring forecast accuracy allows you to spot problems early.
An abrupt unexpected change in forecast accuracy is often the result of some underlying event. For example, if unbeknownst to you, a key customer decides to carry a competing product, your first indication might be an unusually large forecast error. Routinely monitoring forecast errors allows you to spot, investigate and respond to these changes early on—before they turn into bigger problems.
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1. Forecast at the right level.
Sales Forecasting accuracy can be greatly improved by deciding on the right level to sales forecast at. Is a forecast at SKU level appropriate? In many environments it is not and greater detail must be made available by segmenting history and forecast by channel, sales region, or even customer. In other cases companies are currently forecasting at customer level when a more accurate forecast could be achieved with less effort by working at a higher level. Send us your sales history for real demo
2. Review forecasts at aggregate levels
When reviewing item level forecasts it is all to easy to "pad" each item's forecast just in case. It is not until the item level forecast is aggregated and reviewed at a brand or product category level that the cumulative effect of this "padding" is exposed in the form of a clearly unachievable growth in forecast over history. Aggregate level forecast review is an essential part of the forecast review process because it allows for a "sanity check" of the forecast compared to history and preferable company budgets. Any anomalies must be identified and corrected before putting the forecast into the inventory planning system.
3. Review forecast by exception
20% of your products are the important ones so why not use ABC analysis to focus on the products which are most important first while the mind is still fresh? Why not use deviation filters to identify the few products in the database which have unusually high or low trending forecasts when compared to history? Survey
4. Measure and report forecast accuracy
MXI Forecast Pro UK (Free Trial available) allows you to review and report on forecast accuracy as required. 100 Standard reports offer analysis to help you identify weak areas and opportunities for forecast accuracy improvement.
Success breeds success
A forecasting process will rarely be successful if the progress is not measured and the results reported to all participants. Take advantage of the functions available and start your forecast accuracy graph this month. Let everyone know how "good" or "bad" they are doing and what progress they have made over time. Success breeds success. Contact us now
SAVE YOUR FORECAST EVERY MONTH
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Forecast Pro users in the UK are always asking. We want the benefits of accurate statistical forecasting however we are not experts in exponential smoothing, holt winters but we need the projections, forecasts. Where do we start.
After you connect to the data and you are staring at a time series forecast for the first time. House sales data, incidence of cancer in the health area, tax revenues whatever it is. It is forecasted data, there is time series history preferable 2 years worth. And you need to start improving the accuracy of the forecast and begin to enjoy the benefits you signed up for in the first place. Free 30 Trial request
Here are some things you need to do. Define the forecast process, how often are you going to do it. Decide on which dataset you are going to concentrate. If Sales are the focus concentrate on sales, don't try to improve Stock at the same time. This pays off in the medium term as you will learn to interpret the results faster and understand them. Overrides are encouraged as it adds experience and knowledge to the process.
So having decided on what data to concentrate, don't get sidetracked by colleagues wanting the benefits in their area until you have built up some experience. And don't be afraid to override.
When you have done this document it. Write a little company procedures manual so that new users gain quickly from your experience. Now you are already a million miles on from using spreadsheets.
One of the trickiest topics is "What level of the data do I project at" - We will discuss this in another session or blog however there is no right answer other than it is entirely iterative. You concentrate on the level that garners the best returns and allows you time to critique the data best. There is always noise in data in all data and you need to learn to exclude this. For example, In a Sales Channel it takes time to see which level is best, Group Sales, Territory, Product, Model Range, Customers, SKU.
That's why we have agreed to provide a free Forecasting Review on your data to Forecast PRO users and people who need to improve forecast. Talk to the experts in forecasting and get a free forecast of your data: Register Now: Click here
Just like giving up smoking one day at a time.
In future blogs we will speak about updating forecasting with actual end of month sales, what level to project at and other topics of interest to end users.
Free Offer
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Worldwide indices surged in January 2010 providing evidence of strong recovery in Manufacturing. The Financial Times reported gains on important manufacturing barometers. However when Nicolas Sarkozy boasted of France's recent strong performance it was too much for Madame, she dozed off at an event near Nice.
France is growing at the fastest pace in a decade and the President is taking all the credit. He maintains that French growth is finally poised to use the same technology, for example manufacturing software to replicate the growth the US enjoyed a decade previously. He claims that the Americans used technology such as ERP Software, Supply Chain management softwareoc, stock Software, ERP systems to drive a lean manufacturing explosion and a decade long boom. The President's wife was so interested she soon fell asleep.
Learn about Manufacturing Software:: Contact MXI
The Institute of Supply Management Index in America, a key measure rose to its highest level since 2004 from 54.9 to 58.4.
Further evidence from ASIA and Europe indicates manufacturers are ramping up production everywhere to meet demand. China continues to outperform, good news from South Korea, Taiwan. India is moving at its fastest clip since 2008 where HSBC PMI index is at 57.7
Even Europe is moving out of the slow lane nice and slowly though not too fast for the old lady. The Eurozone Purchase Manager Index steadily speeding up to a heady 52.4 from 51.6.
Weak Sterling helped UK to its best growth in 15 years and UK Govt stated UK production increased at an annual rate of 5.7% in the last quarter of 2009. Germany and Italy remained strong with even Germany retreating to 2nd place as largest manufactured
goods exports behind China.
The Institute of Supply Management Index in America, a key measure rose to its highest level since 2004 from 54.9 to 58.4.
At MXI Software we specialise in Demand Managment, Forecasting, ERP, MRP Software, Manufacturing Software, Stock software, lean manufacturing. Many of our manufacturing customers are the leaders in their sector.
That's why we provide free White Papers and Resources Free to companies wanting to drive growth and reduce cost. Click Here
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Have you ever watched a football match on the TV without the score in the corner. Business needs the same clarity. It might be Stock Turnover, Demand Management, Forecast Accuracy, On time delivery, Production times, Margin control, Quality Control levels.
The objectives are usually easily defined, lower stock, more sales throughput, less administration, better productive use of the plant. When this is all done it will be a quality focussed lean manufacturing implementation.
TIP - CYCLE Count stock regularly
One customer this year really impresed us, Shannon based SMART Electronics use EFACS Manufacuring Software. SMART cycle count 10-30 random parts every day. And it really makes a big difference in their business. This level of precision, discipline and certainty in their system hence their business literally wins them business and reduce costs.
Cycle counting is a Stock count by another name. Randomly select parts every day, check the parts and adjust your Stock Control system until its correct. Watch out it may take a year to complete.
Maybe a lot of work but worth it. No tedious all night counts with Auditors, looking all over the plant to find one item that may have been already used or shipped.
Sometimes using your IT systems features can introduce new process and efficiency gains into your business despite the aggravation with Manufacturing Team Members and Line Managers. We will talk about further examples in future articles. No extra cost just using an existing feature in your system.
One touch recovery of information means customer service enquiries can be dealt with immediately. Is it in stock? When will it be ready? Can you quote it today? At a time when service is vital, simple things done well matter.
Easy as 1,2,3.
- Simplified Better Stock Control
- Cheaper Faster Production
- Reduce Production Times & Increase Output
- Increase Sales
It's not a race
Smaller concerns can achieve a lot in 13 - 18 weeks, Larger Companies need much longer.
- Agree your objectives early with the principles in your business.
- Choose an easy subject matters for early wins (i.e. Sales Orders, Stock Control, Purchasing)
- The bigger the concern give yourselves more time and more modest goals
Further short articles will appear in months to come on how to and the benefits of implementing manufacturing software. Idiots Guide II (name to be changed when we think of it) speaks about off shore manufacture and how your manufacturing software can help.
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Business Forecast Systems in Boston has released the TRAC variant of its Forecast PRO software series. If Forecast PRO were a BMW it would be the 7 Series.
Users such as Toyota, Siemens, IBM, Coca Cola who already use FORECAST PRO for expert statistical forecasting can accellerate and deepen their use of Forecast PRO seriously. TRAC will let them tackle problem forecasting issues quicker and more intensively to meet demand, reduce cost and increase sales.
Forecast PRO TRAC allows all sorts of organisations examine their demand understanding it better and faster. Once the forecasts are agreed by everyone, the results are then integrated into the main Sales/Purchasing forecast and loaded into the ERP system.
Many Sales and Operations Planning, Sales and Supply Chain people find the forecasting element of their job difficult, tedious and boring. Yet getting some accuracy into the projection could be worth millions. Usually there is already a Spreadsheet based planning process which is a derivative of the main ERP System. Spreadsheets are known not to be very accurate.
TRAC hits the sweet spot where an organisation is struggling to meet the planning/demand management/sales and operations planning/ forecasting needs of the business.
TRAC produces statistically accurate forecasts for 1000's of product items instantly (it should do after 20 years), Products Groups, Customers, Territories. Using its new features Forecast PRO TRAC helps planners using the latest TRAC technology and features to improve the accuracy of the entire process dramatically.
TRAC targets the problem predictions, demand planning issues and forecast's much more quickly, accurately hopefully bring the less accurate forecasts upto the level of other better forecasts.
The new Watefall report, demand management capabilities, MAPE reports and Graphical reports afford users the same benefits statisticians enjoy. Greatly improving the Sales & Operations planning, forecasting function within the business.
In an organisation with sales of 100 million this improvement could amount to several million in the first year.
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