Excel Forecasting Systems or help with Specialist Software
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Forecasting Software including Forecasting with Excel

At Forecast Solutions we can help improve the use of existing forecasting software or we can assist in a software selection process.

Provided the scope of the forecasting task is not too large or complex we may be able to design and build a forecasting system in Excel, eliminating the need for licence and maintenance fees for specialist software. An advantage of Excel forecasting software is the complete flexibility in approach, meaning it is often possible to include features that may be hard to find in proprietary software without having to pay for a myriad of unnecessary tools as well.

Although an Excel forecasting system has great flexibility, there is a point at which increased complexity and the need for a more sophisticated approach triggers the need for specialist demand forecasting software.  At that point we can help with software selection.  We have a very good understanding of forecasting software and have implementation experience with some proprietary systems.

Forecasting in Excel

The most common approach to forecasting is the use of time series forecasting methods such as exponential smoothing where historical seasonality and trend are identified and used as the basis for a forward projection to create a forecast. Forecast Solutions has experience in building these methods in Excel to good effect.

Another approach to forecasting is based on causal and effect. A causal analysis can be carried out to quantify the effects of drive factors, such as pricing, weather or economic indices. Following a suitable analysis it is possible to incorporate the resulting formulae into Excel to create a forecasting system.

An advantage of Excel forecasting is that it is possible to combine the results of a causal analysis with time series projection, something not usually possible in proprietary forecasting software.

 Excel Forecasting

The advantage of forecasting in Excel is that there is total flexibility in designing a system to meet the precise needs of the business.  Proprietary software will usually have a number of strong features, but it is hard to match the versatility Excel forecasting. For example there is a very common problem in proprietary software that the analysis of seasonality, particularly with weekly sales data, results in a very ragged seasonal profile that is not credible and not helpful for planning purposes.  With a system built in Excel it is possible to deploy simple methods to overcome this problem.

Forecast Solutions can work to improve an existing forecasting process based on Excel or we can develop a completely new solution. A solution in completely standard Excel is often sufficient, but we can partner with Excel and VBA specialists such as Perspica to provide a more user friendly interface if such is desirable.

 Two level working

It is often necessary to provide visibility of the forecast at two different levels of detail. For example, a FMCG company that supplies the major high street supermarkets will probably want to work on the forecast at the SKU x Account level, particularly if there is a busy promotional programme. Then there will be a need to review the forecast at the total SKU level, perhaps then feeding the result through to a stock replenishment planning process. These facilities can be provided within the Excel system, including an effective method for dealing with promotional planning.

 Stock Replenishment Planning

The forecast at SKU level can be picked up and used for stock replenishment planning. Analysis of historical data or forecast accuracy, combined with the replenishment lead-time and the required customer service target enables safety stock to be suggested in terms of quantity or days cover. The current position is updated with a latest actual stock count plus the dated inbound stock arising from previous replenishment orders. The system then suggests the new replenishment order to be placed and creates a stock development plan going forward. The user can override the safety stock to be used or the actual replenishment order to be placed.

Forecasting Courses and Workshops

Forecast Solutions offers a number of training courses and workshops. All of the training makes use of worked examples using Microsoft Excel and one course is especially intended for those who already carry out forecasting in Excel or intend to do so in the future. Delegates are left with a number of working templates for common forecasting methods. Click here for information on forecasting training including the Excel Forecasting Course.

Specialist Forecasting Software 

As mentioned, there is a point at which increased complexity and the need for a more sophisticated approach triggers the need for specialist demand forecasting software. We are happy to help improve the use of any existing proprietary software. Alternatively we can review requirements for software and help select the most appropriate sales forecasting software for the business.

Factors that may tilt the balance in favour of specialist demand forecasting software rather than Excel include:

  • Very large number of entities to be forecast

  • Frequent introduction of new products or listings

  • Need to maintain complex hierarchies for products and/or customers

  • Multi-level forecasting e.g. pushing top-down from a higher level of product or customer

  • Multiple units of measurement e.g. costs, prices, revenue, gross margin

Demand forecasting software is available at a wide variety of different levels of cost and complexity.  The array of alternatives can be somewhat overwhelming.  At Forecast Solutions we are familiar with a number of low cost sales forecasting software solutions and some very large and expensive systems such as SAP APO and JDA. However, Forecast Solutions is especially well placed to advise on a number of potential mid-range solutions and can give expert help in a software selection process.

Specification of Forecasting Software

The first stage is necessarily to understand the processes and methods that are currently used, together with the main business requirements. Then it will be possible to scope out the forecasting system in terms of levels of detail, time horizons, the range of demand forecasting methods likely to be useful, types of user and the interfaces that are needed with other systems. A software requirement can then be drawn up and agreed through the business.  

Features to consider in mid-range Forecasting Software

A modern demand forecasting software solution should not just be a clever set of complicated forecasting methods. It should in effect be demand planning software in the fuller sense, a forecasting support system that helps all the stakeholders engage in the forecasting process.  As well as containing the essential statistical forecasting tools it should support multi-user engagement by all who need to review and modify the forecast based on commercial judgement.

Every business is different, but here are some of the features that we find are frequently needed in a mid-range sales forecasting software solution:

  • Ability to forecast in weeks, calendar momths, accounting months or 4 wk periods

  • Flexible product / customer hierarchies for forecasting and reporting

  • Multi-level forecasting with bottom-up, top-down and middle-out capability

  • Effective seasonal index calculation across all forecasting methods

  • Product lifecycle tools including obsolescence and succession

  • Tools to deal with abnormal historical data including history override

  • Good range of forecasting methods including exponential smoothing

  • Automatic selection of the forecasting model of best fit

  • Facility for users to explore and select alternative models

  • Forecast overrides using number substitution or percentage changes

  • Ability to apply manual or profiled events to forecast or history

  • Multiple units of measurement, particularly prices, revenues and margins

  • Forecast archiving for forecast accuracy reporting over specific lead-times

  • Multi-user access with the ability to restrict access based on functionality and product / customer hierarchy elements

  • Flexible scheduled data input of transactional or aggregated sales history

Forecast Solutions can help determine the processes and methods that are needed in order to build an effective system returning the best possible forecast accuracy.

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