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Spreadsheets Are Outdated for Demand Forecasting. Here’s Why!
Spreadsheets Are Outdated for Demand Forecasting. Here’s Why!

August 1, 2022

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Excel spreadsheets have been a reliable demand forecasting tool for a long time, but they’re not fit for today's dynamic markets. Spreadsheets require you to manually input demand and sales data for your business. They are hard to manage, difficult to understand, and often unreliable. There is no question that spreadsheets are useful, but when it comes to ensuring accuracy and maximizing profit in an ever-changing market, an upgrade is necessary. Companies are now moving to updated demand forecasting solutions like Demand Planning and Forecasting Software.

Demand Forecasting Software has outsmarted spreadsheets when it comes to accurate demand forecasting. Within minutes it provides accurate, reliable forecasts, which would take hours to generate on spreadsheets. And the capacity for automation means the software is more accurate and less dependent on human intervention.

This article discusses the problems that spreadsheet users often face during demand forecasting and how they can be solved with specifically designed software.

Challenges of demand forecasting with spreadsheets

Here are a few common challenges that demand forecasting with spreadsheets presents and how specific demand forecasting software can help you overcome them.

  1. Data Corruption

Often, to ensure data is kept up to date in a timely manner, many people are given access to the spreadsheets used for demand forecasting. But because humans are fallible and often working under time pressure, this makes the data vulnerable to errors, mistakes, and corruption. A single error from any user can cause you to lose data or compromise the quality of your forecasts. Also, a lag in updating sales data on these sheets can lead to forecast inaccuracies.

Demand Forecasting Software automatically updates the data as your products are sold and your inventory changes. This helps avoid corruption, error, and out-of-date data.

  1. Lack of Scenario Analysis

Another significant drawback of Excel is the inability to perform “what-if” analysis, which is an important part of any business forecast. Spreadsheets are functional for the most basic forecasting techniques, but if you try to perform complex forecasting, it’s extremely time-consuming and vulnerable to errors.

Almost all forecasting software enables you to perform quick and efficient “what-if” analyses for your products within minutes, so you can stay prepared for unprecedented market changes.

  1. Data Access Control

When you share your spreadsheets with any user, you share all the data along with it. Every user on every level has access to the entire sales history, forecasts, and more. This can leave your data vulnerable to corruption or misuse and can cause significant loss if it falls into the wrong hands. Spreadsheets can be easily copied and shared without traceability.

Demand Forecasting Software allows you to manage data access for every user, so you only share necessary information with them. You can also track changes in your demand forecasting data to stay updated.

  1. Lack of Scalability

Demand forecasting needs for growing businesses change rapidly, and spreadsheets are often an inefficient means to meeting these needs. They must be manually updated every time your inventory changes and they require effort and patience to generate reliable forecasting results. As the number of SKUs grows, maintaining spreadsheets becomes more cumbersome and less effective.

Demand Forecasting Software uses automation to generate accurate forecasts even if the number of SKUs increases. It can accurately manage data and generate precise forecasts in the blink of an eye.

  1. Difficult to Access Sales History

With spreadsheets, when there are multiple data sources, it can be difficult to track changes in the data, and it can be challenging to analyze past data and monitor older forecast versions. Multiple users make it cumbersome and often tricky to manage sales history.

Specifically designed Demand Forecasting Software enables you to track changes in your data and monitor your past sales data for comparison or analysis, along with how the data is altered and by whom.

The right demand forecasting software

With so many options available, finding the right demand management system for your business can be tricky. This is where we come in.

 


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Karishma Shikalgar
Marketing Manager

Avercast LLC is an industry-leading supply chain management company that integrates 250+ advanced forecasting algorithms.

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