How can AI-driven forecasting add concrete value to your business?
The dynamics of the cement industry have changed over the past decade, and companies are looking to create value by embracing technological advancements that empower them. The inherent complications in the industry—for example, disposable income of consumers, rate of housing development/ construction, government regulations & policies, competitor activity, the impact of weather in the construction industry, etc. have made the process of planning across multiple products whilst maintaining an acceptable level of efficiency, increasingly harder.
Sales & Operational Planning (S&OP) is a crucial component in the business. S&OP refers to an aspect of supply chain planning whose goal is to create a unified, consensus-based business plan with input from the organization’s key functional areas. Forecasting is a key ingredient in S&OP because it’s highly dependent on accurate demand forecasting.
The traditional approach
Part of the problem is the tools used for forecasting.
The existing, more traditional forecasting methodologies are highly dependent on subjectivity and can be slow at times due to extensive human intervention. A good forecasting framework needs to be agile and fast in order to respond to business dynamics & market volatility faced by the industry.
What is FORECAST Squared?
Highly Accurate Forecasting at Scale for Business Users
FORECAST² is a highly scalable and agile forecasting framework that can automatically train 1000s of customized forecasts at the desired level of granularity, with just a few clicks.
Besides taking into account company-specific variables (price, discount, promotional expenditure, competitor pricing, etc.), the system has the functionality to capture the impact on demand due to external variables like rainfall, temperature, macro-economic influencers (inflation, Consumer Price Index, etc.), holidays.
How can FORECAST Squared help the cement industry?
Clever machine learning and artificial intelligence algorithms can bring in accuracy improvements of 20% to 30% while making provisions for the users to generate 1000s of customized forecasts in a very short period of time. This can be achieved at the desired level of granularity—be it national, regional, any internal demarcations, or even at the retail outlet/ hardware level.
— Having a regional level, scientific prediction of cement sales could help your business set more realistic sales targets and systematically evaluate the expected output. It will help capture the region-specific dynamics which are at play.
— You could go one step further and obtain forecasts at the retail outlet/ hardware level. It creates more visibility and control over replenishments levels and subsequently would help minimize out of stock situations.
— A highly accuracy accurate forecast can also help streamline your raw material procurement and production planning.
There is no need to rely on intuition and guesswork anymore.
Forecasting is not the end…
Forecasting is always a means to an end, not the end itself.
FORECAST² is equipped with an inbuilt module that incorporates forecasts with supply parameters and recommends the most cost-effective procurement plan for your finished goods and raw material.
It will tell you what to stock, when to stock, and how much to stock.
Especially in the current context where, import controls are affecting businesses around the country, and importers in the industry are struggling to meet consumer demand and manage operating costs.
Extended credit periods can expose your business to foreign exchange fluctuations and may strain your working capital. The impact could be significant in times of high uncertainty and volatility in the forex market. Thus, it is critical to find the correct balance between stocking the right amount and managing the impact of foreign exchange risk.
The FORECAST² inventory module will enable you to precisely plan your procurements to get the best out of each dollar spent by tracking currency fluctuations, methods of freight, and working capital.