Advanced Demand Forecasting

Planning for the future represents the largest risk a company makes each year. Understanding how and why demand moves provides an incredible advantage in the market place.
Most demand forecasting solutions have only one capability, usually simply predicting sales or demand. While having an accurate sales forecast number is imperative for planning your business model, Advanced Demand Forecasting enables you to optimize. Advanced Demand Forecasting makes predictions over time and adjusts itself to the ongoing fluctuations in demand. This solution does not sacrifice accuracy or make compromises; Advanced Demand Forecasting shows you what influences the forecast and how you can optimize it.
Here are the key capabilities that separate Advanced Demand Forecasting:
• considers internal and external factors affecting the business and accounts for them when developing predictions
• shows how each individual factor – such as weather or promotions – contributes to sales and demand
• takes an incremental value from each factor – such as one additional degree in temperature or one additional add placement – and tells you what how that variance impacts demand and to what extent
• predicts demand on a company-wide, geographical, and an individual store level
How is the solution able to do this? Advanced Demand Forecasting is not a one-size-fits-all solution. It is uniquely tailored for each business and takes about 6+ months to deploy. Time Series Forecasting forms the baseline of Advanced Demand Forecasting and leverages historical company information, such as past sales, and uses that to predict future performance. We look at factors that affect each individual business and develop forecasts based on them to discover which ones have the highest impact. For a more in-depth and technical look at the engine that powers Advanced Demand Forecasting read Part 2 of this series!
So do you need Advanced Demand Forecasting? Honestly, it’s more a question of when rather than if and the answer to that depends on your organizational needs. As technology evolves, every market is becoming more analytically driven and cost-effective. Most organizations are perfectly happy operating with commonplace demand forecasting functionalities until the day they need to optimize in order to stay ahead of or keep up with competitors. The sooner your organization implements Advanced Demand Forecasting, the sooner you optimize your operations and the greater the value returned.

Demand Forecasting is an established problem with many approaches and solutions in the market. How is Neal Analytics’ approach different?
• It focuses on solving the key weaknesses that almost every other solution has:
o Only performing well at macro levels where aggregation helps smooth predictions
o Being a black box that doesn’t explain why the forecast has changed
o An inability to account for likely future events that will affect the forecast
• Our demand forecasting engine leverages state of the art modeling techniques to give your business a clear picture of where demand is heading at individual store and SKU levels.
While accurate forecasts for local operations are critical, our solution goes further to analyze the key demand drivers behind each forecast. This will help your business identify the internal levers you can pull to grow your sales or market share, as well as react strategically to external forces.

Weather:

  • Temperature
  • Precipitation
  • Wind
  • Humidity

Sales Execution:

  • Number of Sellers
  • Wait Time
  • Length of Customer Interaction

Marketing Spend:

  • Discounts
  • Price Changes
  • Ad Spend
  • Promotion Mix

SKU Assortment:

  • Presence of Key Products or Product Groups
  • New Products
  • Product Lifecycle

Social Media:

  • Mentions
  • Sentiment
  • Interactions
  • Length of Interaction

Competition:

  • Competition Sales
  • Prices
  • Promotion Events
  • SKU Overlap

Waterfall visualization of how a change in sales over a time period is driven by various factors

Real-Time Responses to Changing Market Trends

When timing is everything, the sooner you can identify where demand is heading the more effectively you can adapt to changes in the market. Our approach allows for tactical interventions for each market to maximize demand.

Understanding the drivers behind demand gives you a clear direction for action to intervene or modify your business strategy and mitigates paralysis due to uncertainty. From practical capabilities like being able to identify which stores underperformed last week and the leading causes, to advanced resource allocation to maximize the impact of every SG&A dollar, we go beyond providing numbers to deliver novel capabilities.

Reporting and Analysis Excellence

Our Advanced Demand Forecasting can provide a macro-level picture for the entire business as well as drill down to forecast for segments based on customers, products, or other existing company structures. The demand engine itself is advanced enough to detect seasonality and trends to produce forecasts at the window and granularity you need.

Reporting and Analysis Excellence

Our Advanced Demand Forecasting can provide a macro-level picture for the entire business as well as drill down to forecast for segments based on customers, products, or other existing company structures. The demand engine itself is advanced enough to detect seasonality and trends to produce forecasts at the window and granularity you need.

Predictions Using High Confidence Data from Feature Forecasts

If a holiday has a big impact on your business, it’s probable that its effect is dampened by typical time series forecasts common in most forecasting solutions. While there’s nothing wrong with time series forecasting, (in fact our solution includes it as a baseline,) more is needed to account for the magnitude and variance of upcoming events. What if that holiday happens a week earlier? What if the weather is forecasted substantially warmer than normal?

Not only can you do this “what if” analysis, we can integrate forecasts from such models as features in our demand forecasting engine. Stop trying to use only the past to predict the future and use Neal Analytics instead!

Configurable to Respect your Business Logic

The forecasting engine we developed is highly customizable based on your unique business requirements and data availability. Common customizations include multiple forecast timeframes and developing specialized models for specific market or company segments.

We will work side by side with your Subject Matter Experts to determine the critical internal and external datasets most likely to influence demand and bring them into the model.

Predictions Using High Confidence Data from Feature Forecasts

If a holiday has a big impact on your business, it’s probable that its effect is dampened by typical time series forecasts common in most forecasting solutions. While there’s nothing wrong with time series forecasting, (in fact our solution includes it as a baseline,) more is needed to account for the magnitude and variance of upcoming events. What if that holiday happens a week earlier? What if the weather is forecasted substantially warmer than normal?

Not only can you do this “what if” analysis, we can integrate forecasts from such models as features in our demand forecasting engine. Stop trying to use only the past to predict the future and use Neal Analytics instead!

Configurable to Respect your Business Logic

The forecasting engine we developed is highly customizable based on your unique business requirements and data availability. Common customizations include multiple forecast timeframes and developing specialized models for specific market or company segments.

We will work side by side with your Subject Matter Experts to determine the critical internal and external datasets most likely to influence demand and bring them into the model.