3 Tips to Improve Sales Forecasting

In order for your manufacturing business to know how many units of each item to produce, you will need a sales forecast. Any manufacturing business’s sales department is extremely important. This department ensures that the products being made will be sold to customers and will not sit in inventory for months on end. 

As its name suggests, a Sales Forecast is an estimate of a company’s sales during a specified time frame. These forecasts are extremely difficult to accurately generate, but they are also extremely beneficial to any manufacturing organization. Sales forecasts tell you how much revenue you should expect in a given time frame. The biggest challenge encountered is that the amount of sales generate can vary greatly by product and by the time of year.

Sales forecasting softwares can take some of the complexity out of the forecasting process. Companies of all sizes will benefit greatly from having a sales forecast. This is because it can serve as a planning tool that allows you to plan your resource capacity and ensure that you have enough materials on hand to start production.

Sales forecasts can also help you assess the performance of your sales team. The sales department can also use it as a target to know how many products they should sell. When the sales department and the production facility use the same targets, you will have a more aligned manufacturing operation and prevent stock shortages and overages. 

While it is extremely challenging to create the perfect sales forecast, there are a few things you can do to come close to improving your sales forecasting process. The following section will explore some of these tips so that you can generate increasingly accurate forecasts and bring your manufacturing operations to the next level.

Tips to Improve Sales Forecasting

Here are some tips on how to improve sales forecasting for your manufacturing facility:

• Collaborate - One common misconception about sales forecasting is that there is only one method of forecasting and that it represents the truth for all departments in a business. In most cases, businesses require multiple forecasts to represent the needs of all departments involved. This is because the sales team is concerned with meeting sales quotas, whereas the product management and operations teams are interested in knowing how much of a product is needed and when it is needed. In order to improve the forecast, it is essential to gather everyone’s input to create a forecast that is agreed on by all departments. Putting together multiple forecasts will allow you to accurately represent the needs of the organization as a whole. 
• Re-Evaluate - A sales or demand forecast is not useful if it is not re-evaluated. This is why you should develop a forecasting process that allows for re-evaluation and modification as time and conditions change. This is particularly useful if most of your production is planned based on the forecast. If situations change and affect the forecast, you should have the ability to assess and modify it in order to adjust the production plan as well. While this process is challenging for businesses that use manual data entry and spreadsheets to plan and schedule production, production planning and scheduling softwares can make this process extremely easy and quick to execute. 
• Keep it Simple - Most businesses are usually not that complex or sophisticated, which is why there is no reason to have a highly complex sales forecasting system. Using a planning and scheduling software with forecasting capabilities is more than enough for most businesses. This will allow you to look at your past sales and production data to generate a forecast for your sales and demand. Having a simple forecasting process that works for most products will allow you to spend more time on the exceptions and increase the accuracy of the forecast. The other important aspect is to be consistent with the forecasting method used so that you are able to perfect it over time when you re-evaluate it.

With PlanetTogether, we now have a consistent tool for our planning and scheduling that is used by most departments, from supervisors, production planners, purchasing, IT staff, and management.

BRUCE HAYS, DIRECTOR OF MANUFACTURING, J&J SYNTHES

An Advanced Planning and Scheduling (APS) system such as PlanetTogether APS will make your forecasting process a breeze and allow you to re-evaluate and modify it if needed. This software will allow your sales and production departments to be on the same page in terms of the demand for goods, leading to efficiency optimization and waste elimination.

Advanced Planning and Scheduling (APS) Software

Advanced Planning and Scheduling Softwares have become a must for modern-day manufacturing operations as customer demand for increased product assortment, fast delivery, and downward cost pressures become prevalent. These systems help planners save time while providing greater agility in updating ever-changing priorities, production schedules, and inventory plans. APS Systems can be quickly integrated with an ERP/MRP software to fill the gaps where these systems lack planning and scheduling flexibility, accuracy, and efficiency.

With PlanetTogether APS you can:

• Create optimized schedules that balance production efficiency and delivery performance
• Maximize throughput on bottleneck resources to increase revenue
• Synchronize supply with demand to reduce inventories
• Provide company-wide visibility to resource capacity
• Enable scenario data-driven decision making

The implementation of an Advanced Planning and Scheduling (APS) Software will take your manufacturing operations to the next level of production efficiency by taking advantage of the operational data you already possess in your ERP system. APS is a step in the right direction of efficiency and lean manufacturing production enhancement. Try out a free trial or demo!