Unlocking the Power of AI: How Demand Forecasting Software Can Take Your Business to the Next Level
Every retailer’s supply chain revolves around demand forecasting, and for a good reason: the demand forecast is crucial to sales, profitability, and the customer shopping experience, and it impacts the whole supply chain. Retailers nevertheless struggle to provide precise, timely demand forecasts despite having a well-established demand forecasting tool and processes.
Studies show that 63% of retailers have too much inventory in slow-moving categories and items, whereas 65% of shops routinely stock out on fast-moving categories and products. If clients don’t find what they’re looking for, they may switch to your competitors, which costs businesses money and hurts the reputation of your business.
AI and ML to the Rescue
AI is rapidly gaining ground in supply chain management, particularly in demand forecasting. By incorporating Artificial Intelligence into your demand forecasting you can reduce erratic inventory purchases, overstocks, out-of-stocks, and margin erosion
Machine learning integrated with AI integrated into a demand forecasting tool, allows you to automatically identify patterns and relationships in massive data sets that would be difficult or time-consuming for people to identify. Machine learning algorithms are automated, allowing them to examine all data at scale, not just a subset of it. By analyzing data that receives little to no human attention, they can uncover a tremendous amount of economic value.
In a conventional demand forecasting tool, data is sent to a computer, which then analyses it and produces a result by applying it to a static, predetermined set of criteria. But, with an AI-powered solution which is integrated with machine learning, the computer becomes adaptable, dynamically responding to data changes and changing the projections in line with them. This significantly increases accuracy and makes it possible for businesses to respond quickly to demand over time.
Traditional systems make it difficult for retailers to forecast at the shop level, especially when there are millions of different SKU and store combinations. However, an AI-based demand forecasting tool can eliminate all the manual involvement that is currently necessary and produce projections that are much more accurate.
How is AI Effective?
Pattern Recognition – Kronoscope by Fountain9 is one of the best demand planning software that uses AI not only to identify historical sales patterns and forecast future sales but will also help you predict how the market will behave in the future, it evaluates various sales patterns, including non-linear trends, seasonality, lags, and market movements. This useful information can be used by businesses to determine how much to manufacture.
Internal and External Trends – Many trends impact the sales of products. Promotions, marketing, pricing, and product lifetime are internal trends. Regional weather information, demographic changes, the gross domestic product (GDP), social media activity, and consumer sentiments are external factors that impact product sales. So, while predicting sales, all of these elements must be considered. All of these characteristics are sensed by AI on a real-time basis to produce precise forecasts.
What-if Scenarios – AI can identify various sales scenarios to produce precise projections. It is crucial in business to assess the likelihood that an event will occur in order to generate precise forecasts. To plan your sales and supplies for the future, it would be beneficial to consider the changing conditions.
Continuous Learning – Demand projections can be revised in real-time based on the most recent data since AI systems can continuously learn from new data. This is crucial in sectors like fashion and technology because consumer demand is subject to quick shifts. Kronoscope by Fountain9 is one of the best demand planning software that can give firms current and precise demand projections by continuously learning from and adjusting to new data.
Scalability – AI integrated into a demand forecasting tool can manage enormous amounts of data, making it appropriate for companies of all sizes. Conventional demand forecasting techniques can be labour-intensive and time-consuming, especially for companies with a sizable product portfolio. In contrast, AI-based demand forecasting software can swiftly and effectively evaluate massive amounts of data, making it the perfect choice for companies with many goods or clients.
Granular Forecast
In today’s food retail, granular forecasting is something which is very critical as it deals with highly perishable products. a. With correct estimations, it is simpler to position products in the supply chain to maximize sales and minimize waste. Since they serve as the foundation for resource and capacity management planning, granular predictions ought to be seen as a prerequisite for successful operations. A product’s demand can rise quickly in one region while declining in another.
Most organizations combine demand data on product and geography dimensions for forecasting. Predictions established at such high levels are then broken down for day-to-day supply execution, but this data disaggregation procedure is laborious and time-consuming; thus, possibly, the only choice was monthly forecasting at an aggregate level. But times have changed, and now with the help of the best demand forecasting tool integrated with AI, Kronoscope, you can handle vast amounts of data effectively to understand the daily client demand and the changing patterns at the most minute level.
About the Company
Kronoscope by Fountain9 is an AI-powered demand and inventory planning solution that assists retail organizations in precisely predicting demand at the most granular level across numerous channels. It considers 9 different factors, including seasonality, historical sales data, consumer behavior, commodity indices, unfavorable weather events, and so on, to estimate demand accurately. Kronoscope is one the best demand planning software that assists in precisely estimating demand for each SKU so that customer needs may be satisfied on time without the need for excess stock.
The software can help you to automate the purchase & replenishments. With just one click, you can quickly and easily create buy plans that consider the fill rates, current inventory levels, lead times, shelf life, open orders, dynamic safety stock levels, and other factors before an item’s reorder threshold is reached.