Zansa › Answers › Forecasting and data science
What data is needed to forecast production and raw-material needs for a manufacturer?
You need demand history or orders, current stock, work in progress, bills of materials, supplier lead times and minimum order quantities, production capacity and scrap rates. Forecast end-product demand, then convert it to material requirements through the bill of materials, adjusting for stock on hand and orders in transit.
Lead time variability and supplier reliability often matter more than the demand forecast itself, so track actual delivery performance.
Useful practices:
- Forecast at product-family level when item-level data is noisy.
- Separate make-to-order from make-to-stock items.
- Set safety stock by material criticality and lead time.
- Capture planned downtime and maintenance.
Compare forecast material usage with actual consumption to find errors in bills of materials or scrap assumptions.
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