You're facing forecasting inaccuracies in your ERP system. How will you ensure optimal inventory levels?
When your ERP system's forecasting goes awry, maintaining optimal inventory becomes a juggling act. To refine your approach:
- Revisit your data inputs. Ensure the accuracy of the data feeding into your forecasting models.
- Increase forecasting frequency. Regular updates can help adjust for market volatility and trends.
- Collaborate with suppliers. Strong partnerships enable more flexible responses to unexpected demand changes.
How have you adjusted your inventory strategies in response to forecasting errors?
You're facing forecasting inaccuracies in your ERP system. How will you ensure optimal inventory levels?
When your ERP system's forecasting goes awry, maintaining optimal inventory becomes a juggling act. To refine your approach:
- Revisit your data inputs. Ensure the accuracy of the data feeding into your forecasting models.
- Increase forecasting frequency. Regular updates can help adjust for market volatility and trends.
- Collaborate with suppliers. Strong partnerships enable more flexible responses to unexpected demand changes.
How have you adjusted your inventory strategies in response to forecasting errors?
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The first step is to understand the nature of forecast errors. Is it overall demand or are there specific patterns by product / commodity type? Is it a long-term situation or does this year's imbalance arise from a short-term peak or trough? When we know all this we can see whether these figures could have been predicted had our model been set up differently. We can then perhaps change the way we work - one thing I've done several times is urge people to move away from reliance on statistical techniques and use their own understanding of the market. Of course, one fact must never be forgotten. Forecasts are always wrong. If we need to forecast in order to get orders we need to buffer in an amount to take care of likely variances.
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start by refining data inputs, ensuring accurate historical sales, demand patterns, and lead times are captured. Leverage advanced forecasting tools within the ERP system to account for seasonality, trends, and external factors. Implement automated reordering thresholds based on real-time data, and integrate demand signals from sales and production teams. Regularly review forecasts and adjust based on actual performance. Additionally, perform periodic inventory audits to identify discrepancies and fine-tune ERP settings for improved accuracy.
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