Five Steps for Integrated Demand Forecasting  

Do you have a solid forecasting solution, and have you integrated your forecast with your Aptean Food and Beverage ERP/JustFood solution? We often find confusion and suboptimal implementations of planning methodologies with our clients. This results in too much of the wrong inventory or stockouts of vital items. 

Oftentimes, companies struggle with long lead times for raw materials, aging products, elevated or short inventory, seasonal sales boosts, and on-demand customer fulfillment. The implementation of proper demand forecasting systems and tools can help to remove these pain points from your business model. 

What you need to consider:  

1. Define your forecasting methodology 
2. Define your forecasting toolset 
3. Clean up/organize your history 
4. Define your forecasting process 
5. Integrate your forecast solution to your ERP 

Define your Forecasting Methodology 

If your business model requires rapid response to customer orders either via shipments from your warehouse or through wholesale distributors/retail, then most likely you are producing to stock and as such using some type of planning methodology to determine how much inventory to carry. If your raw material lead times exceed your production/sales order lead times, then you are purchasing your raw material inventory with input from a forecast. There are many factors that influence a forecast including internal factors such as promotions, marketing, price changes, and expiration dates. There are also external factors such as customer trends, competition, calendar events, and seasonal changes. Making sense of all those inputs requires experience with forecasting and a solid consensus-based forecasting tool that consumes your order shipment history and can consider all your forecasting factors. 

Business Central/Aptean Food and Beverage ERP require an external solution to properly solve the forecast generation. 

In Business Central/Aptean Food and Beverage ERP you have four reorder policies: Fixed Reorder Quantity, Maximum Quantity, Order, Lot-For-Lot. We can use history to develop a forecast to determine optimal reorder points and set those reorder points via a feed from a forecasting tool or we can generate a forecast and feed the actual forecast to Business Central and set the Reorder policy to “Lot-For-Lot” which will then look at the forecasted demand over a future period and generate a reorder proposal. 

Having clarity on the types of reordering policies you require for each type/class of inventory is crucial to determine the type of functionality you require from your forecasting tool and to drive the proper setup in Business Central. 

Adroit North America can help you to develop your detailed forecast methodology and to define your requirements for a forecasting toolset. 

 

Define your Forecasting Toolset 

We can broadly categorize planning/forecasting toolsets into three groups: 

Simple Single Channel  

• Consume history and generate a statistical forecast in an excel type format 

Top Down/Bottom Up Consensus 

• Consume history, segment the history by channel, customer type, product groups, etc. 
• Generate a bottom-up statistical forecast 
• Modify forecast segments via adjustments 
• Factor in promotions and other factors 
• Finalize and publish the forecast 

Integrated Business Planning Suite 

• Incorporate all of the top-down/bottom-up consensus forecastings 
• Facilitate a full sales and operations planning process 

Adroit North America can help you to evaluate and select the proper forecasting/planning tool for your organization. 

 

Clean-up/Organize your history 

A critical element to successfully generating a predictive forecast is to clean up and organize your sales/shipment history. You need to understand how you wish to stratify your forecast these typically include: 

• Market Segment 
• Geographic Region 
• Customer 
• Item Class 
• Item 
• Sales Order Required Date 
• Actual Ship Date 

We need to ensure consistency on units of measure. The sales history should be in units and the base currency. Adroit North America can help you clean up your master data, and your history data to ensure proper inputs to your forecast. 

Define your Forecasting Process 

Upon selecting the proper tool and having your history in the order you next need to establish a planning calendar. The calendar may vary for each forecast segment.  Broadly speaking the forecasting steps will consist of: 

• Closeout transactions 
• Import History 
• Run Forecast Generation 
• Review forecast and add in internal and external factors 
• Segment / approve forecast 
• Determine/load adjustments to reorder points if applicable 
• Feed forecast for those items set for lot for lot reorder policy to Business Central 
• Run MRP/MPS in Business Central 

Adroit North America can help you to define detailed forecasting procedures and to realize the benefits 

Integrate your Forecasting Solution into your ERP 

To realize the power of your forecasting tool we need a way to effectively import the forecast. Business Central/Aptean Food and Beverage ERP provides a utility to import your forecast from Excel. For this method, you would need to export your forecast from your forecasting tool to an excel format file, ensure the fields proper map to the imported fields of the utility, and then within the ERP initiate the import. 

The ERP also provides APIs which would enable an integration directly from the forecast tool to your ERP. 

Adroit North America can help you to implement the integration that makes the most sense for your situation. We are skilled in utilizing Business Central’s API and can develop a seamless integration.