What your customers ordered in the past may not be the same as what they will order in the future. Products change in popularity and the marketplace can be fickle. Knowing that, how can you make better inventory predictions so that you don’t run out of popular items or get stuck with obsolete inventory?
You could flip through a stack of customer contracts or purchase orders to see what they have bought from you over the last few years. You may even be able to save some time and search through a sophisticated spreadsheet for that information. However, even if you could establish a pattern of preferred products or a set of regular replenishment orders, there is no guarantee that your customer will want those same items in the same quantity for future orders. The past is rarely an exact mirror of the future.
In order to make more accurate forecasting predictions, you need to get closer to your data with an appropriate business management solution. An enterprise resource planning (ERP) solution will collect all of your important business data, including customer orders, into a single repository. A comprehensive ERP solution provides management for business financials, supply chain, inventory, manufacturing and distribution operations, human resources and payroll, and other core operations. An integrated solution will make it easier to get into your data and spot trends that may impact what your customers are buying. You can watch for trends in the inventory you buy and the products you are manufacturing or distributing to customers. You can also watch for trends in customer purchases by customer, by region, or otherwise determine which products sell best under certain circumstances.
The more robust ERP solutions also offer forecasting functionality such as the ability to look at historical data and evaluate current conditions while making adjustments for certain expectations. You can look at the marketplace and consider sales goals, marketing campaigns, and other future plans along with your existing data. Essentially, you can use all of your business data, make manipulations and adjustments, and come up with likely scenarios that you can then act on.
Manual review of historical data and spreadsheet comparisons can’t provide the insight that a comprehensive ERP solution can. Your future isn’t tied directly to the past. Contact The Resource Group for more information about using an ERP solution to make more accurate forecasts, so that you stay aligned with customer needs and demands.
By The Resource Group, a Microsoft Dynamics GP Partner out of Washington