Know Today What Will Be Needed Tomorrow – Building Confidence in Demand Planning

Reliable demand forecasts are at the heart of an efficient and resilient supply chain. Only with a precise understanding of future demand can organizations effectively plan material requirements, production capacity, and resource allocation.

When managed through a rolling planning process, forecast accuracy improves over time, providing planners and decision-makers with increasing confidence in actual demand, material availability, and production capacity.

Scenario simulation capabilities enable organizations to assess best-case and worst-case outcomes. External market influences and internal business factors can be evaluated proactively, allowing leadership teams to make informed decisions before challenges materialize.

Incorporating All Relevant Business Information

Effective demand planning requires the integration of all factors that influence future demand.

This includes not only reliable inputs from sales and marketing but also customer insights, market events, management assumptions, strategic initiatives, and many other business drivers.

Accurate and intelligent demand planning has a direct impact on downstream supply chain processes, including production planning and scheduling, procurement, inventory management, and overall operational performance.

Key Functions in Detail

Selecting the Right Forecasting Method at the Push of a Button

Creating reliable demand forecasts requires the accurate interpretation of historical data to generate meaningful predictions for the future. The ifm solution applies a range of statistical forecasting methods to determine the most suitable approach for each demand pattern. The examples below illustrate that not every forecasting methodology is equally effective at reflecting real-world demand development.

Croston Forecasting Method

The Croston method highlights deviations between actual demand values (blue bars) and forecast values (green bars).

Seasonal Forecasting Method

While the Seasonal forecasting method provides a more realistic projection than Croston, neither model delivers the optimal level of forecasting accuracy required for highly reliable demand planning.

Recommended

Prophet Delivers the Best Results

The illustration below shows the additive forecasting model, commonly known as the Prophet method. Forecasted values and actual demand are closely aligned, demonstrating a significantly higher level of predictive accuracy.

Among the forecasting approaches evaluated, Prophet emerges as the clear leader. Its ability to closely match historical demand patterns provides a strong foundation for generating highly reliable future forecasts and improving planning confidence.

Core Capabilities of the Forecasting Solution

• Integration of external data sources
• Rapid identification of trends through intuitive visual analytics
• Simulation of multiple future scenarios
• A real-time, single source of truth for all stakeholders
• Flexible and customized reporting capabilities