Traditional forecasting
When I retired from a very successful distribution company in 2018, we were creating our strategic plan using the most current and sophisticated methods available. Sales forecasting is achieved by analyzing previous sales cycles and following leading economic indicators.We also reviewed other companies’ and suppliers’ forecasts in our distribution vertical. Using that information, we projected our top customer sales.
We created our five-year strategic plan using a combination of SWOT analysis, future asset development, and market share projections. We also evaluated the potential impact of adding new locations and products. Given the tools available at that time, these methods yielded the best planning results. Today, new technologies enable us to sharpen that forecast.
Unforeseen events
The above type of strategic planning could not foresee the effects of a global pandemic, 2023’s inflation, supply chain immobilization, generative AI, international wars, and tariff corrections. Also, each of those forces impacted how distributors operate, compete, and, most importantly, plan for the future. Moreover, to effectively compete in today’s technologically fueled market, new methods need to be added to traditional strategic forecasting techniques.
Keeping up
To continue to build resiliency in your strategic planning, keep up on new methods through sources like Distribution Strategy Group, National Association of Wholesaler-Distributors, and their affiliate, Modern Distribution Management.
It is especially important to keep an eye on Artificial Intelligence (AI) applications. AI technology both reduces the cost of doing business and improves customer personalization. Lastly, these initiatives are critical to a good strategic plan.
Exciting times
We live in an exciting time for distribution. How do you plan for the future? You sharpen your forecasting skills by including the use of new technology and improving customer personalization in your strategic planning.
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