Question

Describe in detail how you created a forecast of demand to guide your purchasing, hiring, and production scheduling. Obviously you do not have past demand data, but explain what information you do have, and how you used the available information to form an action plan. Sources of information include the market research desk, AND the contracts available to you for bidding. Which pieces of information were the most useful to you? How did you combine your information into a forecast and a how does this forecast fit into your bidding strategy?

Answer 1

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Forecasts. Or, in other words, the opportunity to look into the future and make educated forecasts of any number of elements of development such as resource procurement, distribution of workers, transport logistics, and more. In reality, forecasting is such an increasingly valuable tool for manufacturing firms that Gartner's report suggested forecasting (and its accuracy) and market volatility are two of the biggest challenges manufacturing firms encountered in supervising their supply chains.

However, this same report indicated that reliable prediction was one of the top priorities for manufacturing companies as modern manufacturing continues to develop, diversify, and expand into new world regions. Whether you are dealing with market forecasting (projections based on current business demand or rate of use for a given product) or supply forecasting (data on current production patterns and influences that could affect or change such trends), businesses need to be mindful of how and why forecasting is such a vital activity.

More efficient production scheduling — So much of contemporary market forecasting policy can be contrasted to looking in a mirror of the rear view. Yeah, where you have been can often help you determine where you're headed, but that doesn't always help you avoid a multi-car crash on the highway. Nonetheless, planning gives companies the ability to look forward to preventing this potential tragedy through more efficient production preparation to satisfy customer demands and market forces and comply with the supply of raw materials and component parts. Since forecasting gives manufacturing firms a leg-up on these scheduling and output cycles aspects, enterprises will deal with more efficient work.

Inventory management and reduction - If a manufacturing company can better understand and predict demand or orders for certain products, then they can work with suppliers more effectively to achieve optimum inventory levels to reduce the likelihood of partial overages or shortages. Forecasting tools provide the clarification of inventory scenarios for manufacturing companies to determine more reliably the level of customer demand and the quantity of component parts needed to successfully meet orders and maintain scheduled delivery times. Inventory reduction not only reduces the amount of storage or container space, but also helps businesses streamline their operations by eliminating costly losses.

Cost reduction-We have just addressed that planning reduces costs associated with surplus products or component parts, but forecasting still allows companies to reduce costs by supplying enterprises with the foresight not to buy more inventory than required to meet customer orders. However, planning helps to reduce costs associated with a range of other important manufacturing activities such as work assignment and scheduling, raw material procurement, and some front office or customer-facing duties. Since modeling affects the production cycle from beginning to end (and because production cycles affect any contact point in the value chain), a more reliable and cost-effective development system is accessible.

Optimized transport logistics-Imagine Manufacturing Company A updates the transport logistics only to discover massive costs associated with transportation to a certain location of a certain quantity of material. The company tries to merge deliveries or shipping forms, or perhaps even change delivery dates based on customer requests, in order to curb or even reduce these costs. Whilst these may be decent options, modeling helps companies to take this a step further and evaluate their transport plan regularly and identify areas where efficiencies can be improved and redundancies removed.