Comment: Smart forecasting, smarter decisions

Distributors and marketing firms in the fresh produce industry face a daunting task. They must plan availability of hundreds of products, while ensuring cohesive supply chain management.

And without a demand-driven approach, the pitfalls are clear: each department looks at the recent past to predict the future, and often relies on slow and disconnected spreadsheets.

The result? A disjointed planning process across the company. Limited collaboration across functions. Too much focus on department goals, rather than broad organisational objectives.

If you rely only on what just happened to forecast what is next, this is comparable to driving a car using only the rear-view mirror. Ok, it works if you only go in a straight line. But when the path starts to turn – a promotion here, supply disruption there – then you have a problem. Down this road lies oversupply, missed sales, and increased costs.

Fresh4cast’s latest whitepaper, which you can download from our website under Resources, highlights the crucial, yet often overlooked, importance of medium- to long-term demand forecasting and planning in the fresh produce industry.

With the help of advanced forecasting models and specialised planning tools, it demonstrates how the accurate interpretation of demand signals can significantly enhance the success of a supply chain success.

Forecasting or planning?

Often used interchangeably, demand forecasting involves predicting future customer needs using historical sales data, market trends, and other indicators. Techniques range from simple extrapolations to sophisticated machine-learning models. The aim being to interpret things like seasonality, promotional impacts, and product life-cycles.

Demand planning, on the other hand, is a management process. It relies on human insight and team collaboration to decide what the organisation will execute. It uses the demand forecast as its foundation and interconnected planning tools to adjust volumes based on the team’s experience and qualitative feedback.

Fresh produce needs better

The fresh produce sector is characterised by variable supply, perishable inventory, dynamic market conditions, and weather uncertainties. It’s certainly not for the fainthearted. So it requires effective demand forecasting and planning to boost economic and environmental sustainability.

This approach accelerates financial projections and ensures a responsive supply chain. Most importantly, planning software can integrate supply and demand data streams to create a consensus plan, one that aims to maximise sales opportunities, mitigate constraints, and reduce overall future risks.