They wished to keep inventories within tight limits, proportionate with the size of their operations. Other business metrics, such as budgets, sales targets, promotions, and local demand are also factored. Product categories, sales regions, and many departments provide input and all depend on accurate forecasting. The overarching goal for a new demand planning and forecasting solution was to allow the company to take proactive measures instead of simply reacting to changes in demand. Strong alignment processes, close collaboration with customers, and proper forecasting methodology are critical to success. To have the right quantity of the right products in the right place at the right time, the company relies on predicting the orders their customers will place as precisely as possible. In the food industry, products are processed in very large batches to keep unit prices low, ensure quality, and take advantage of raw ingredient availability. When you add promotional strategies and pricing, food and beverage forecasting becomes far more complicated – even marginal swings in accuracy can have a significant impact on profits. Seasonal swings in demand, availability of agricultural products for raw ingredients, retail trends, and the perishable nature of many products make it challenging to plan production and organize logistics. Planning and forecasting in the food and beverage industry are highly complex, especially on a global scale. The company at times had too much stock on hand, yet experienced stock outages during promotions. Their system had become difficult to use, had a limited range of forecasting models and had difficulty forecasting demand when variables like promotions were added. A global food supplier that also provides direct delivery to stores had outgrown their current demand forecasting software. SAS Demand and Supply Planning Improves Forecast Accuracy and Sales for a Global Food Supplier When one billion units roll off your production line every day worldwide, accurate demand planning and forecasting are critical.
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