Deliver What Customers Want

In the business world, customer satisfaction has become the top priority for most companies, especially consumer products companies. Actually, I would argue that putting the customer first has always been a genuine way to establish a competitive advantage. It's important to center the customer when determining the correct product mix because they are the ones who ultimately determine the success or failure of a company's products. In this article I explore why customer-centricity is crucial and how forecasting can help in demand and inventory management.

First and foremost, customer-centricity means placing the customer's needs and wants at the heart of the decision-making process. By doing so, companies can tailor their product offerings to meet specific customer needs, ultimately leading to increased sales and customer loyalty. By focusing on the customer, companies can better understand their needs and preferences, which can help to create a better product mix.

The method in which to center your organization's planning activities starts by using a forecast to inform demand and inventory. By analyzing past trends and forecasting future demand, companies can ensure that they have the right products in the right quantities at the right time. This helps to minimize inventory costs and adopt lean holding practices, move through obsolete and end-of-life material, and most importantly, ensure that customers always have access to the products they need.

One of the key benefits of forecasting is that it allows companies to plan ahead, which can help to minimize the risk of stockouts or overstocking. Stockouts occur when a company runs out of a product, which can lead to lost sales and unhappy customers. On the other hand, overstocking can lead to excess inventory, which can tie up capital and increase the risk of waste or obsolescence. By using forecasting to plan ahead, companies can strike the right balance between supply and demand, ensuring that they have the right products in stock at all times.

Another benefit of using forecasting is that it allows companies to be more responsive to changes in customer demand. By monitoring demand patterns and reacting quickly to changes, companies can adjust their product mix to meet evolving customer needs. This helps to keep customers satisfied and can help to differentiate a company from its competitors.

Establish your forecast by setting the guidelines of conditions of the data. Consider using past performance, retail channel forecasts, backlog of orders, industry reports or any mix of these to establish your forecast. Then measure for accuracy, aligning your industry's standards to an acceptable variance. Apply learning to improve this key metric.

Customer-centricity is essential for any consumer products company, and using forecasting to inform demand and inventory management is a good practice that can help companies to achieve this. By placing the customer at the center of their decision-making processes and using data to make informed decisions, companies can ensure that they have the right products in stock at the right time, while minimizing costs and maximizing customer satisfaction