When done well, supply chain forecasting helps companies fulfill orders in a timely manner, keeps costs low, and keeps companies and consumers happy.
However forecasting is often a primary barrier facing brands’ supply chains.
Managing your supply chain is critical to the health of your business, and you ideally need any partnering provider to be a leader in supply chain forecasting. The right 3PL should make accurate supply, demand, and forecasting data fundamental to the way they deliver logistics services. Let’s dive in to six traits to look for when selecting a strong 3PL partner:
Deep logistics forecasting has become a necessity in today’s world. Accelerating volatility and complexity in the supply chain and beyond requires 3PLs to be streamlined and hyper-responsive to accurately forecast and effectively meet customers’ demands.
Adding logistics forecasting into a business’s service level agreement and operational processes can reduce friction within the supply chain, from clearing customs shipping out of distribution centers, as well as create a safety net for potential supply and demand issues with consumers. Forecasting gives you the ability to anticipate your customer’s needs (link to another article) and complete customer’s orders as soon as you receive them.
There are multiple benefits to aligning forecasting with inventory management and capacity. Inventory management becomes a much easier process. Stock shortages become less frequent, the amount of inventory you keep on hand is tailored to your consumer’s purchase patterns, and employee scheduling and labor costs are more effective to your bottom line. For many retailers, peak shopping season is on the horizon, and even large global brands are preparing for potential delays and stockouts.
Transportation is the heart of forecasting and navigating both your supplier’s requirements via an expansive fulfillment and transportation network is a key ability to look for in a 3PL. In fact, optimizing supply chain networks can be a fundamental driver of cost reduction, making it a great core competency to look for in a logistics partner. Knowing your supply chain lead times, transportation modes, and patterns are key to knowing when to re-order inventory. Having multiple modes of transportation and multiple product manufacturers can turn severe supply chain issues into creative problem-solving opportunities.
Forecasting is a constant learning process that relies on reviewing you and your 3PL’s data on a continual basis. Continuous improvement creates smaller and smaller margin for error and a smooth, steady, and streamlined supply chain from end-to-end. This increases customer satisfaction and accelerates growth for your brand as well.
Using a robust inventory management system can streamline your inventory re-ordering process. Bringing data in via your sales channels and 3PL provider can create an accurate, data-driven picture for your inventory management system to develop an ordering solution. Identifying trends within your customer’s buying habits will give your team insight into order volumes and purchase times.
The benefits of supply chain forecasting are numerous : reducing your operational costs, increasing efficiencies, keeping your supply chain flexible, maximizing continual improvement, and aligning our services with your business strategy.
To implement this forecasting, your 3PL partner should be an expert in data management and modeling techniques, but also well know your business.
As a result, good modeling will support stronger, more confident planning and strategy.
Want to be accompanied in finding the best partner for your supply chain forecasting?
Need to dive deeper into effective, reliable forecasting or need a framework to start forecasting? Read more in this whitepaper: