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Very Good Demand Forecasting
Forecasting product demand is critical to planning and managing many businesses. For many of our clients, reducing the error rate in their forecasting errors by one percent can be worth millions of dollars per year.
VGO specializes in dramatic improvements in demand forecasting for our clients, with
reductions in demand forecasting error rates that are always at least 20%.
Many corporate functions are driven by demand forecasts. The VGO approach helps our clients integrate their demand forecasting processes with their planning processes.
How VGO can help...
Most demand forecasting solutions involve software that predicts future demand based on prior data. Many errors in demand forecasts arise from the multitude of ways that future consumer demand can be unlike past demand. VGO’s
approach integrates software demand forecasting systems with a novel procedure for organizing and staffing demand forecasting teams. The VGO demand forecasting method has reduced error rates
by at least 20% for each of the more than sixty clients who have used it.
VGO works with our clients to show them how work process changes can reduce demand forecasting error rates in dramatic ways. The depth of experience of the VGO team, combined with the breadth of clients who have successfully used our methods, lead to dramatic improvements in demand forecasting.
Past successes...
- For a major apparel manufacturer, we reduced the average forecasting error by 38% with respect to their merchandisers’ error. This reduced safety stocks alone by one third while improving product availability.
- For a computer manufacturer, we reduced their average forecasting error by 47% compared with their existing system. This reduced finished goods inventories by 23% while improving delivery speed.
- For a beverage manufacturer, we reduced their average forecasting error by 52% compared with their existing system. In addition, we provided a systematic approach to managing items with sporadic demand. This reduced their inventory investment by one-third while improving their availability.
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