Welcome to the third part of our blog series outlining essential additions to your 2024 demand planning enhancement wishlist. After delving into ML Augmented Statistical Forecasting (part 1) and, Leading Indicator Forecasting (part 2), we now continue with the last part of your 2024 wish list: Order Progression Monitoring.
Order progression monitoring, particularly in the context of comparing forecasted orders with actual progression, is a linchpin in the efficacy of demand planning. By leveraging order progression monitoring, businesses can bridge the gap between forecasts and actual orders, paving the way for optimized operations, enhanced accuracy in predictions, and increased customer satisfaction.
Order progression monitoring captures the amount of order currently in for a certain period, and adds an estimated amount of future incoming order on top. These future orders can be represented by the expected value, or by a higher and lower confidence bounds of the future orders. I recommend looking at the confidence interval, as it gives insight into the probability of reaching the forecast.
In essence, order progression tracking coupled with robust forecast comparison mechanisms elevates demand planning from a reactive process to a proactive and strategic endeavour, positioning businesses to navigate dynamic market conditions with finesse and confidence. There are 3 options:
The added value of order progression monitoring will be high if you have sufficient order book visibility. If you see your statistical forecast is not realistic before you get into the lead time horizon, you can still mitigate the negative impact.
In essence, this wish list contains 3 topics (ML Augmented Statistical Forecasting, Leading Indicator Forecasting, Order Progression Monitoring), that can take your demand planning process to the next level. You can start with any of these 3 depending on where your business needs are.
May these aspirations guide us toward a future where demand planning is not merely a strategy, but a harmonious symphony of data, innovation, and insight. Let us cultivate a landscape where foresight meets action, creating a realm of unparalleled efficiency and customer satisfaction.
If any of these items on the demand planning wish list caught your attention, let's have a chat. We can discuss these strategies and share ideas.
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