Demand and Capacity Planning Helped a Machine Manufacturing Company to Reduce Demand Forecasting Errors by 10%
A leading player in the machine manufacturing industry wanted to reduce the percentage error in their demand forecasting approach, which was approximately 45%. The inconsistent nature of their current demand and capacity planning processes curtailed their ability to manage inventory stocks and ensure the ready availability of high-demand products. The Business Challenge Demand and capacity [...]READ MORE >>
A leading player in the machine manufacturing industry wanted to reduce the percentage error in their demand forecasting approach, which was approximately 45%. The inconsistent nature of their current demand and capacity planning processes curtailed their ability to manage inventory stocks and ensure the ready availability of high-demand products.
The Business Challenge
Demand and capacity planning turns out to be a crucial factor when it comes to simplifying the logistics value chain. It’s growing popularity can be attributed to its ability to integrate smarter demand forecasting and predictive analytics into the capacity planning process. Unlike the obsolete demand forecasting processes where businesses had to rely solely on historic demand patterns to plan for future production needs, analytics-based capacity planning strategies empower businesses to tailor their production capacity to more accurate demand forecasts that account for numerous variables across the supply chain.
Embrace the power of analytics-based demand management solutions to gain a leading edge in the market. Request for more information now!
The client wanted to leverage demand and capacity planning to reduce their average percentage error and drive productivity. One of the core objectives was to analyze and understand the demand patterns across various regions. To do so the client chose to partner with Quantzig to leverage its demand and capacity planning solutions to coordinate their capacity planning efforts in different countries, including rationalizing SKUs and consolidating suppliers.
Solutions Offered and Value Delivered
To help the client tackle their challenges, we developed a robust demand and capacity planning framework, which included recommendations for capacity management and safety stock optimization. By leveraging demand and capacity planning solutions, we successfully reduced the total average percentage error to less than 10%, while simultaneously improving capacity management. The result was a multi-step, holistic framework developed to optimize the client’s supply chain operations. However, a significant factor of success was the comprehensive consideration of costs, real-time demand patterns, and lead times when determining the best way to maximize ROI through capacity management.
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Furthermore, we also improved the accuracy of demand forecasts with added business constraints, such as minimum order quantity, ordering intervals, demand patterns, and total lead times to identify and quantify risks associated with out-of-stock scenarios. The use of analytics dashboards further improved the efficiency of their demand and capacity planning process.
Quantzig’s advanced analytics solutions also enabled the client to:
• Improve demand forecasting accuracy
• Overcome out-of-stock scenarios
• Improve production capacity
From demand forecasting to capacity planning, we have the expertise and the domain knowledge to address all your supply chain challenges. Contact us to know more about the benefits of our demand and capacity planning solutions.