Forecasting
Forecasting
Introduction
The article highlights the benefits of modern technology to businesses whereby all business operations for both small and big business enhanced unlike in the past where only large enterprises favored. Digital technology provides insights that help retailers in very many ways. A study conducted shows that 90 percent of fashion retailers exclude past lost sales in their forecasts, but an amalgamation of digital technology with supply chain necessitates that the lost sales included. According to a study done by Omni-Channel Allocation and Replenish 2018-19, it’s important for small enterprises operating both in digital and physical world to understand every metric of Omni-channel for proper future forecasts and effectively manage of inventory. Furthermore, the use of different data by retailers ensures a competitive edge.
The article shows a report of the study done that indicates a few retailers who have not embraced the new tool integrated for forecasting. The article further adds that the new integrated digital tool helps to track a history of lost sales whereby lost revenue KPI considered during planning allocations and replenishment. The tool proves essential particularly in decision making for competitive advantage, but only 10 percent of retailers apply it in their allocation method. The 90 percent of retailers who do not utilize historical sales data complicates their forecasts, and it becomes challenging for companies to sensitize these retailers of the importance of optimizing their supply chain and inventory management for accurate future sale forecasts.The president for Neogrid suggested that there is hope for improving the situation saying that demand-based replenishment aid both manufacturers and retailers optimize inventories for all company channels and also reduce a loss of sales and low sales after peak season. Inventory restocking comprises of 46 percent retailers demand-based, and this scenario makes retail industry very complex particularly for Omni-channels.
Also, the article says that to optimize inventory, retailers should conduct automatic replenishment planning and focus on warehouse, supplies, and e-commerce for the availability of inventory all through. Therefore retailers can minimize running out of stock, boost turnover through increased availability and also reduce the low static list.Finally, the article emphasizes that retailers should use effective replenish and allocation process for forecasting to help in decision making for competitive advantage.
For effective business management thorough tracking and forecasting should be conducted. Furthermore, supply chain management and operations in a company are essential for business success. The article relates with prediction in the sense that to improve future sales a retailer should analyze the history of sales, and the ignoring of past sales data leads to false forecast that does not reflect the reality of enterprise. Integration of digital technology with physical operations provides a robust platform that captures all transactions for accurate forecasting. In other words, prediction based on some history of data whereby digital technology plays an integral role in enhancing rapid, comfortable and convenient compiling of data., but small business too can use forecast as a tool for competitive advantage. Generally, forecasting has some requirements such as proper inventory management, supply chain management and optimization of operations.
References
Helzer, Jay / Render, Barry / Munson, Chuck (2017). Principles of Operations Management – Sustainability & Supply Chain Management,10th Edition. Pearson Publishing ISBN: 9780132968362
90% of Retailers Ignoring Lost Sales When Forecasting Data
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