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The supply chain is a living, fluctuating entity that can be studied, its motions anticipated. Manufacturers of all types—whether they be agile, discrete, process, custom, etc.—require strong forecasting skills to stay on top of that entity and meet customer demand. The better a business can forecast and anticipate what is to come, the faster they can produce product and get it to their customer, the higher their customer satisfaction, and the more sales they are likely to make.
Built into Dynamics 365 Business Central is a Demand Forecasting tool to help businesses plan for their future consumer demand. In addition to this, companies have the ability to utilize the Sales and Inventory Forecast extension for AI-based predictive forecasting. Depending on the company’s needs, either tool is ripe with potential to boost inventory management efficiency.
Demand Forecast built-in
Demand Forecast in Business Central is an out-of-the-box feature used for planning anticipated sale of items throughout a set period of time (often a month or quarter). Typically, a company would prepare for the following year by manually entering what they expect to sell based on past years.
These numbers—as well as other numbers such as on-hand inventory and purchase orders—are used in the master production schedule (MPS) and the material requirements planning (MRP) to determine what to order and what to produce in a given timeframe. This is a standard tool within an ERP, and in Business Central it is flexible to whatever is best suited for how your business forecasts. Set the timeframe for the forecast to months or quarters depending on how drilled in you want your forecasts to be and how varied your sales are from one period to the next. Change the forecast to register a currency or items of inventory.
Sales and Inventory Forecast extension
The Sales and Inventory Forecast extension uses Azure AI to generate inventory and sales forecasts based on historical data within Business Central. The forecast box appears in Inventory item list in the Details box after the forecast has been setup and run. From the forecast, you can manually create sales orders and purchase orders and the numbers of which will calculate.
It’s important to note that a Business Central environment has to have enough historical data for the selected forecast model algorithm to generate the forecast.
It may be obvious, but the enormous benefit of AI predictive analytics is that it does all the work for you, saving time you would have spent analyzing your numbers manually. And of course, any sort of forecasting—particularly those that factor in past trends, future predicted sales, current inventory and production orders—will help you avoid inventory shortages and make the most of your cash flow.
These forecasts are highly customizable via the Sales and Inventory Forecast Setup page. You can specify such parameters as the period type (month, day, week, quarter, year), acceptable variance %, the horizon, the periods of historical data that the timeseries model the forecast uses, and stockout warning horizon (which states how far in the future you want to look for stockouts and works with the period type field to determine the horizon). The setup page also allows you to determine when the forecast will run—every week on Monday, for instance—and can also be run manually whenever needed.
Your supply chain and consumer demand is a complex, interwoven web, and it’s many strings need to be tended, monitored, and shifted to maintain its strength and keep it an efficient, working whole. Forecasting is a big part of the battle, and through the out-of-the-box and extension tools provided within Business Central, any type of manufacturer can gain insight and maintain control of their inventory, reduce bottlenecks, boost sales, and increase customer satisfaction.
Get Started
If you’re ready to pull the trigger on a new ERP, reach out to our skilled Business Central technical consultants by clicking the button below. We can show you a personalized demo of Business Central, including forecast abilities and much more, to help you decide if Business Central is right for your business needs.
