Forecasting Benefits all Areas of a Company: Human Resources
by Jackie Biallas
One of the most important benefits of implementing a forecasting system is increased efficiency. With unemployment rates continuing to remain at record low levels, it is extremely important for businesses to work smarter, be more efficient, and increase productivity. In this installment in our series about how forecasting benefits all areas of a company, we will focus on Human Resources.
SMALL BUSINESSES STRUGGLING TO FIND WORKERS
In their October 31, 2019 press release, the National Federation of Independent Business reported that growth in the manufacturing industry is constrained due to the lack of qualified applicants for open positions. While the majority of owners say they want to hire more workers, they are unable to do so because of the tight labor market. Lack of skilled workers is a threat in all industries, not just manufacturing. This means that in order for a business to grow, it must do more with the staff it currently has. They have to work smarter. A great forecasting system will enable them to do this.
INCREASING MANUFACTURING EFFICIENCY
A forecasting system enables the Production staff to plan their materials and workforce according to demand. Production can be prioritized based on the most urgent needs that the forecasting system is projecting. The work can be completed in batches and planned strategically to ensure efficiency and cost effectiveness. A forecasting system allows for greater efficiency in scheduling the workforce since the system will be able to project just how much production is necessary at each point in time and the number of workers required for the jobs.
INCREASING PRODUCTIVITY IN WAREHOUSE AND DISTRIBUTION CENTER
A forecasting system can determine demand of products and the warehouse staff can use this information to strategically place the best-selling items closer to the shipment dock to reduce steps and increase efficiency. It can also help improve receipt flow, reducing the peaks and valleys, and allowing for more consistency in receipts. A forecasting system will also help the warehouse determine how much space will be needed to house each of the items. This will decrease the number of times an item will have to be moved, thus increasing efficiency. In addition, a forecasting system will forecast demand by week or day, enabling management to schedule distribution personnel accordingly and increase efficiency.
PURCHASING DEPARTMENT ABLE TO WORK SMARTER, NOT HARDER
There are many data points to consider when making purchasing decisions. Demand, current inventory levels, vendor lead times, cost, profitability – just to name a few. Oftentimes, this information is scattered, perhaps in separate systems. A forecasting system greatly impacts the job of a Business Analyst or Purchaser, especially if they had been forecasting and planning with the use of spreadsheets. A great forecasting system brings all the vital data into one location, so there is no more wasting time collecting the data or manipulating formulas in the spreadsheets. This alone can save hours, if not days, of wasted time! Reports can be compiled and generated at a click of a button. Trends can be caught more quickly, so that opportunities can be capitalized on and problems can be addressed and contained early.
Effective forecasting and planning require collaboration between all departments of a company. While collaboration is necessary for a comprehensive vision to the business, it also encourages participation and a sense of ownership. A sense of ownership is a critical key to the success of a business, but also to employees’ job satisfaction. Employee turnover is extremely expensive. By encouraging a sense of ownership in the company’s success, turnover will be reduced.
RETURN ON INVESTMENT
At [basic-code] ™, our clients have realized a return on investment of our forecasting system within the first 18 months of usage. Tangible costs, such as inventory, inventory carrying costs, and labor, are reduced. Just as important in this tight labor market, intangible benefits have increased. The efficiency and insight gained through use of the forecasting system leads to a greater sense of accomplishment and job satisfaction.
For more information on how forecasting and demand planning can help your Human Resources Department achieve its goals, contact the industry experts at