Building More Accurate Forecasts
Managing Business Growth and Increasing Forecast Accuracy
Forecast accuracy has a profound impact on business growth. Inaccuracy can lead to excess inventory or to inventory shortages. Excess inventory increases storage costs and ties up working capital. Inventory shortages result in customer dissatisfaction and can cause your business to incur rush fees from vendors and suppliers.
Safelite Addresses Growth with IBM and QueBIT
Safelite reduced planning cycle times by 40%, saved approximately 450 staff hours, and increased forecast accuracy. Through TM1 and SPSS Modeler, QueBIT and IBM helped Safelite achieve 99.8% sales forecast accuracy. Watch how QueBIT and IBM helped Safelite achieve these results in this video.
Read more about QueBIT’s work with Safelite here.
IBM Analytics with TM1 and SPSS Modeler
IBM Cognos TM1 provides a proven and established platform for planning, budgeting, and forecasting. QueBIT uses TM1, integrated with IBM SPSS. This combination help businesses create plans and forecasts that achieve a degree of accuracy that would not be possible using the solutions in isolation.
The combination of IBM Cognos TM1 and IBM SPSS yields a variety of benefits for businesses and their customers.
Meeting Commitments to Customers and Suppliers
The benefit of delivering products or services to your customers according to the agreed-upon timeline is self-evident. Moreover, delivering products or services in a timely fashion has a number of benefits to your organization. These include reductions in expediting costs and increased customer satisfaction.
Providing Accurate Financial Forecasts
Accurate demand forecasting underlies the ability to provide accurate financial forecasts. Specifically, demand forecasting provides critical data for budgeting, such as estimated costs and expected revenues.
Impacts on Sales Planning
Accurate demand planning influences sales planning by establishing a baseline for measuring sales performance. For example, a business might forecast demand by region, channel, or segment and use that forecast to set associated regional, channel, or segment sales goals.
The accuracy of demand forecasts influences inventory control and allow businesses to maintain a correspondingly smaller amount of excess inventory. If actual demand has historically exceeded forecasted demand, one strategy for offsetting the difference is to keep additional inventory on hand. When forecasted demand and actual demand are consistent, businesses can reduce the amount of excess inventory on hand.