In the fast-paced world of retail, accurate demand forecasting is a key component for maintaining a smooth supply chain and ensuring that store shelves are adequately stocked. Long Range Store Demand Forecast (LRSDF) is strategic data that suppliers may leverage to enhance their inventory, production, and logistics planning months in advance.

What is Long Range Store Demand Forecast?

A demand forecast is a projection of what Walmart customers are expected to buy. It represents how much Walmart is projected to sell and when it is expected to sell. It offers a pure, unconstrained view of customer demand, agnostic of any other factors.

Long Range Store Demand Forecast (LRSDF) can be used as predictive data to project future demand for products at the store level. This forecast incorporates historical sales data, seasonal trends, regional preferences, and other relevant factors to provide a comprehensive view of the expected demand over an extended period.

Why Does LRSDF Matter?

Forecasts that are too high or too low can lead to inventory problems and ordering inconsistencies.

When the demand forecast is too high it can lead to:

• An excess in inventory.
• A disrupted inventory flow to shelf, which could lead to stores having an abundance of stock that may lead to items getting lost in the backroom. This can lead to missed sales opportunities .
• Erratic ordering due to skipped order cycles while waiting for the excess inventory to sell through.

When the forecast is too low, it can lead to:

• Out of stocks and nil picks, which could lead to lost sales.
• Other items to be plugged into the wrong position or spread on the shelf, which could lead to overall modular integrity issues.
• Erratic ordering, requiring high orders to make up for excessive inventory outages.

LRSDF is a significant asset, offering insights that can inform various aspects of operations. By understanding future demand trends, suppliers can better align their activities with Walmart’s needs, potentially leading to more efficient and cost-effective business practices.

What Are the Benefits of LRSDF Data?

The following are some of the potential benefits of Long Range Store Demand Forecast.

1. Demand Planning & Production Efficiency

• Visibility into future demand: LRSDF provides insights into anticipated demand at the store level, enabling suppliers to adjust their production schedules accordingly.
• Reduced risk of overproduction or stock shortages: By aligning production with forecasted demand, suppliers may be able to minimize excess inventory or out of stock.

2. Inventory & Supply Chain Optimization

• Optimized raw material procurement: Knowing projected demand could help suppliers plan their raw material purchases more effectively.
• Minimized last-minute rush orders: Accurate demand forecasting could help reduce the need for urgent orders, which often disrupt supply chains.

3. Financial Planning & Cost Management

• Revenue and cash flow forecasting: LRSDF assists suppliers in predicting future revenue streams and managing cash flow based on expected orders .
• Cost management: By anticipating demand, suppliers may reduce carrying costs for unsold inventory and avoid expensive expedited shipping due to unexpected demand surges.

4. Regional & Seasonal Planning

• Adjusting for seasonality and regional trends: LRSDF allows suppliers to prepare for seasonal demand spikes and regional preferences.

Example Use Case

Regional Preference Forecasting

Regional preference forecasting involves tailoring inventory to meet the specific preferences and needs of different geographic areas. Here's how suppliers can use LRSDF data for this purpose:

Steps for Regional Preference Forecasting:

• Geographic Analysis: Identify regional trends and preferences by analyzing sales data for different geographic regions.
• Product Customization: Customize product offerings based on regional tastes and preferences.
• Targeted Inventory Distribution: Allocate more inventory to regions where certain products are more popular.
• Localized Promotions: Implement regional marketing campaigns to boost sales of preferred products in specific areas.
• Feedback Loop: Continuously collect and analyze sales data to refine regional forecasts and adjust strategies accordingly.

Conclusion

Long Range Store Demand Forecast (LRSDF) serves as a valuable tool for suppliers, offering insights that may lead to more informed decision-making across production, inventory management, and supply chain operations. By leveraging LRSDF data, suppliers can potentially enhance their efficiency, reduce costs, and improve customer satisfaction.