3 Ways AI Revolutionizes Demand Forecasting

Written by Heartland | May 1, 2024 3:00:00 PM

By now, we’ve all heard of artificial intelligence (AI). It’s been around, and it is not going anywhere anytime soon. The use of the technology has grown exponentially over the past few years. For example, based on the annual industry report by MHI of 2022, 14% of survey participants indicated that they were utilizing AI technology within their operations at the time. With that said, however, that percentage is estimated to skyrocket by over 70% in the next four years. Why? Because its perks so abundant. From warehouse management to layout enhancement, AI technology can take your operations to levels of efficiency, accuracy, productivity, and safety that are second-to-none. Want three ways to revolutionize the way your business conducts demand forecasting? Simply integrate automation, AI, into your operations and see enhanced efficiency and accuracy, reduced risks, and boosted sales.

In AI-based demand forecasting, the technology examines previous order data, lead times of production, and performance metrics from suppliers to predict specific demand quickly and precisely. In doing so, manufacturers can collaborate with suppliers as well as well enhance production planning procedures and limit shortages and surpluses at multiple stages throughout the supply chain. In fact, AI-based systems do exceptionally well in such dynamic environments because the technology integrates information from a wide range of external and internal sources of data to rapidly react to evolving patterns of demand that would take much longer for humans to forecast. To be specific, AI-based demand forecasting includes instantly evaluating historical information from both internal and external sources by using innovative machine learning (ML) techniques. Machine learning utilizes sets of data and algorithms that are implemented within the computer to identify and handle specific situations, such as acknowledging unapproved credit card usages and finding blind spots of vehicles. Then, in forecasting demand, it puts data into groups and then classifies them as needed. In doing so, analysts are able to predict the probability of demand. In addition to this, the implementation of AI technology into your demand forecasting processes can bring a number of benefits to your operations, such as:

Enhanced Efficiency and Accuracy – A properly integrated AI demand forecasting system uses machine learning algorithms to instantly examine historical demand data as well as outside factors—like promotional events or severe weather, for example—to make demand predictions as accurately as possible. In that, the efficiency that is brought by modernizing this process enables the members of your team to spend more time on focusing on specific business operations instead of manually crunching numbers. Essentially, an increase of 1% in the accuracy of forecasting demand can bring on as much as a .5 decrease in labor costs—which greatly saves money as whole, too.

Reduced Risks, Maximal Mitigation – Of course, precise and accurate forecasts of demand are vital for sufficient risk assessments within the process of managing the supply chain—as they directly affect staffing needs, levels of inventory, allocation of budget, and so many more aspects. Having such a clear and concise view over these pieces of data allow businesses to better handle participants and risk within the supply chain and enables in-depth and expansive communication to everyone involved. In doing so, you get to identify and evaluate risks as they are predicated by the AI technology, allowing you to accurately know the likelihood of them occurring as well as their possible effects. Additionally, you will be able to acknowledge situations that lower risk, maintain adequate service levels, and reduce the effects on profitability. Because of this, you will be enabled to make data-based decisions with the utmost confidence in the resiliency and strength of the changes made to the policies and structure of your operations and network.

Potential for Boosted Sales and Improved Customer Satisfaction – Now more than ever, the competitiveness of the market is ruthless. Customers expect, demand, instant gratification as well as individualized experiences. Because of this, ensuring that the correct product is available in stock at the correct moment and place is crucial. Thanks to accurate structures provided by ML algorithms, businesses are enabled to exceed these expectations as effectively as possible. Which, as a result, can lead to improved rates of customer satisfaction and possibly enhance the performance of sales as a whole, too. With artificial intelligence, you can gain valuable insights into the behaviors, preferences, and buying patterns of your customers. With this information, of course, your team will be more able to accurately identify and pursue the most promising lead. With these automated data processing systems, your team has more time to engage with prospective customers and make sales.

When implementing artificial intelligence (AI) into your operations, a thorough understanding of its benefits will be vital in weighing the pros and cons and considering which provider is best to implement AI-based solutions that enhance demand forecasting. At Heartland, we aim to deliver superior solutions, simpler workflows, and smarter investments. Utilizing AI technology in demand forecasting, specifically, delivers levels of accuracy, speed, and clarity that are unmatched by human-directed forecasting processes. We make sure this choice is an easy one. With our wireless network optimization services, AlwaysConnected, we make sure that your technology is running as smoothly as it should be. With these services, we utilize our abundance of expertise to your business to streamline support, reduce downtime, and ramp up productivity anywhere from 5-10%. Artificial Intelligence (AI) is, of course, only as effective as the network it runs on. Based on evaluations of the market, it is evident to see that AI-directed supply chains are nearly 70% more productive than those who do not utilize AI in their operations. Additionally, by 2028, the global supply chain software management market is estimated to be worth nearly $18 billion. Based on this magnificent growth projection, AI-based systems throughout operations are clearly here to stay—giving you more reason to keep up with the times and implement artificial intelligence into your business’ operations. If you’re looking to completely revolutionize your demand forecasting processes, reach out to a Heartland expert today.

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