During this time of economic uncertainty and the likely increase of tax and expense burden on businesses mandated by changes in law, executives are seeking even greater productivity from the workforce in order to maintain bottom-line profitability or even survival. There is a generations-long history of companies achieving progressively greater productivity. Nevertheless, business leaders are seeking new ways to continue this trend.
Many writers have described a wide variety of ways to squeeze the nth degree of output from individuals of all job descriptions. A range of consultants will happily charge tidy sums for 1-day or 2-day workshops on the subject. There is another way, one that costs very little, if anything, and enjoys a high payback. The prerequisite is that an executive needs confident and effective managers and leaders to realize this productivity increase.
Statistical demand forecasting techniques have been available to industry for decades, but small- and medium-sized companies rarely use them. There are barriers to implementing these techniques, but these hurdles are quickly becoming lower. In this article, I will discuss statistical forecasting of customer demand and of material demand; and how to start using it quickly and cost effectively.
The key benefit to becoming competent at statistical demand forecasting is significant inventory reduction. The cash preserved from this reduction can be used to finance more value added activities. Plus, judiciously reducing all inventory is one of the fastest ways of converting floor space from inventory storage into space for value added activities, like manufacturing – at very little added expense