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Crystal Balls and Economic Forecasts in Distribution

Posted by Gary Feldman on October 13, 2018

As a business owner or manager, you need to make decisions today based upon future estimates and projections. With advanced Material Requirements Planning tools, we can provide insights into specific stocking requirements based upon your company’s order history, but past performance is not always a predictor of future performance. With so much disruption in so many markets, what is a business leader to do?

We often look to industry analysts to help give us guidance of future performance. A recent study by Market Research Future projected 9% compound annual growth in the global construction stone market driven by urbanization and the preference for natural stones. However, these projections are often cautioned by a variety of factors. What new materials will become available that impact demand? What impacts could the current trade wars have on the market?

An annual research study by Deloitte focuses on underlying trends. The Retail – Distribution Industry Outlook Study analyzes trends such as:

  • Brick and mortar retail moving into digital distribution
  • Changes in consumer behavior in the digital age
  • Strategic focus on operational excellence

Small and mid-sized businesses don’t always have access to big data or the investment resources to re-invent themselves and disrupt industries. Typically, small businesses do not have the risk tolerance to change business models while having to meet payroll. However, small and medium sized businesses often have the flexibility to make rapid change to meet specific customer demands.

 

Operational excellence improvement is where SAP Distribution comes in. Combining historical information, current orders and multiple forecasts provides inventory-based companies the tools it needs to:

  • Project inventory requirements
  • Minimize stockouts while reducing the carrying value of inventory.
  • Run what if scenarios to assist in making decisions
  • Assemble, disassemble and plan for kitting activity
  • And much more!

All projections will be wrong as no business owner, warehouse manager or analyst has a crystal ball that can see the future. Keeping up with the latest trends and having the best tools can provide the insight you need to keep up with change and grow your business.

For a free systems assessment contact us today!

Topics: Digital Disruption, Projections

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