In the ’90s a joke circulated that the very existence of the “Reset” button on computers was an unequivocal warning to users meaning the equipment was going to fail. Jokes aside, companies often have their own ”Reset” button to alleviate inefficiencies in their production processes. For example, in the case of safety stock (products that are manufactured in case there is an increase in demand and that) if not sold, go directly to the column of expenses and losses.

The challenges are numerous: retail, manufacturing and supply chain companies face a high number of items and stores that they must supply according to customer needs, estimating that there are no shortages or surpluses, short-term fluctuations that generate inventory problems, segments such as food or medicine where merchandise has an expiration date, development of promotions to take advantage of specific moments, launch of new products with a margin of uncertainty regarding the results that they will produce.

The pandemic added a new ingredient to the uncertainty: its unexpected arrival produced drastic changes in the demand for different products and services. In the first days of confinement, for example, food and hygiene products sales increased at an exponential rate at the same time that items considered “luxury” declined.

But, what if a company could predict the results of the business, even in circumstances as unexpected as a virus that affects a large part of the world’s population? Today technology makes it possible and that idea takes the form of a concrete solution: Intelligent Forecasting. It is enough to have stored and centralized data on the transactions carried out to apply machine learning algorithms and generate highly accurate demand planning with the help of artificial intelligence. Forecast errors are estimated to decrease by up to 25%. In real terms, this can translate into millions of savings as a result of optimal operation.

Among other things, Intelligent Forecasting analyzes recurring patterns of demand, including variations inherent to seasonality: business days, holidays, seasons. It also considers the impact of promotions, price changes, and product display. And add contextual elements, such as the weather, a local event, or the wishes expressed by customers. To contemplate the panorama, external factors are incorporated, that is, those variables that produce changes in demand and that had never occurred in the past. In this category appear the opening of direct competitors, unscheduled massive events (such as fluctuations in the exchange rate) and, of course, a situation such as that experienced in 2020 with COVID-19.

The benefits that emerge at first are centered around the aforementioned savings in inventory management, greater profitability (since it must also be added that there is never a shortage of product) and the fact that the company enters a new business approach, focused on strategic planning and maximum productivity.

But in addition, there are advantages that are not directly related to the organization, but that can be the spearhead of a new sustainable and responsible look: with Intelligent Forecasting you avoid having to get rid of the products that remain unsold. This works directly with the environment, since it contributes to reducing pollution. In industries such as food or health, this last benefit allows avoiding the waste of scarce resources.

Intelligent Forecasting is an excellent opportunity to use the ”Reset” button for the last time, taking into account the inefficiencies of the production processes in order to lead your company into a new era of business.

From Nubiral we offer this solution that will help you obtain precise data at the exact moment, so that inventories are always in optimal capacity, there is no need to pay additional storage costs and the product reaches the customer’s hands in a timely manner each time it needs it.

You can learn more by entering here.