Forecasting – Why is it important?


When operating your business, you have a forecast in place to understand your targets and expectation for the year(s) ahead.  This helps with navigating expectations around resourcing, product holding, financials etc.  Often passing this info on to your 3PL provider isn’t thought of as critical, but failing to do so can have disastrous consequences in getting orders to customers on time.

At SCS, we know the importance of receiving forecasts and utilising them to manage customer expectations, so much so that there is a clause in every contract discussing forecasting.  When we don’t have forecasts in place and volumes deviate from the norm we see the following outcomes:

  • We have to reactively move labour to manage daily order flows, creating bottlenecks in despatch times
  • The team have to re-plan their daily plans to manage a different forecast than expected.
  • Additional storage space has to be found to manage any additional storage requirements, this pulls in additional resources to move pallets around and store correctly.
  • When unforecasted inwards arrives, we have to reactively make room, or delay arrives to manage space effectively.

All of these things lead to slow downs in processing times, and ultimately additional costs and less sales, things that neither of us want!

When we have a forecast, we build the information into our daily planning and we move from the reactionary situation above to a proactive, slick operation that enables us to put the right resources in the right places, have the right space available, and importantly – get orders out the door as fast as possible, making you money!! – this is something we do want!!

Forecasting is a situation where our customers are helping us to help themselves, which is a win-win for everyone. So what’s required from you…..

  1. Provide your Business Manager or Customer Services Manager a forecast regularly, aim for monthly, but quarterly is ok to.
  2. Include details of expected growth to your sales orders, make sure you let us know any promotional activity you are expecting , and the expected spikes that will bring.
  3. Include any plans to grow your stock holding
    1. relate this to an expected increase in pallet spaces
    1. let us know how many extra shipments or containers we will need to deal with, particularly if they are all expected to hit in one go!
  4. If your business model is changing or  you are looking to adding some new services, have a discussion with us so that we can plan with you.

Within the SCS Portal we have built a forecasting module ( here’s a link to a previous blog) I’d encourage everyone to jump into it to  help create useful forecasts!


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