Forecasting

About forecasting

Forecasting makes it easier to plan your production and your purchases in relation to your sales. You can plan days, weeks and months ahead.

Go to the forecasting feature by clicking Warehouse in the top menu and select Forecasting.

Key functions

• You can estimate your sales per customer based on previous sales.

• tracezilla estimates your consumption of semi-finished products, raw materials and packaging for the production of finished products based on your recipes.

• The forecasting feature takes lead time into account, i.e. the time it takes from the goods being ordered from the supplier until you have received them or the time it takes to produce a product.

• The function also takes your reorder point into account, i.e. how many units you must have as a minimum in stock before you need to produce or order new supplies.

• Create production orders and purchase orders directly from the forecasting feature.

• You can also edit the quantity on an open/pending production order or purchase order if you can see in the forecasting overview that the need for goods has changed.

• The forecasting estimate can be based on your current inventory (short-term) or based on your need for goods only based on sales (long-term).

• If you expect to introduce a new product and have created a recipe which should apply in the future, the forecasting function can calculate an expected cost price using Cost price simulations. Please note that this requires tracezilla’s Power Pack add on.

How can trading companies use forecasting?

Trading companies will often need 1-2 scenarios, one long-term and one short-term. More scenarios can be created if forecasts are made for more than one location.

1) On the sales side, long-term forecasts can be made, e.g. 3 months ahead. Based on the expected sales, supply is estimated and purchase orders can be created on the supply side.

2) On the supply side, the actual sales (short-term) can be a starting point for the estimation of supply, e.g. 2 weeks ahead. Purchase orders are then created.

How can manufacturing companies use forecasting?

Manufacturing companies will often use forecasting for 2-3 types of scenarios:

1) A short-term for production planning based on current stock and actual sales, e.g. 2 weeks ahead.

2) A (medium) long-term scenario for estimating sales and planning purchases, e.g. 3 months ahead. The estimate is based on sales, so that the purchase of packaging and other raw materials with a long lead time is done in a timely manner.

3) A long-term scenario for estimating sales for the purpose of negotiating contracts for specific customers e.g. 12 months ahead. The estimate can be made on the basis of previous sales figures plus a calculated trend.

Usefull to know before you start using forecasting

The forecasting function uses data from SKUs and recipes. Therefore, you may benefit from reviewing the following before using the feature:

• Set up partner relationship for SKUs if you want to use the forecast based on suppliers of raw materials and finished goods that are sold to certain customers.
• Make SKUs and recipes inactive that are no longer in use.
• Review and update the SKUs and quantities of these that are specified in recipes.
• Set a reorder point for SKUs, i.e. a minimum stock for when new supplies needs to be ordered.
• Specify lead time for SKUs, i.e. the time it takes from the goods being ordered from the supplier until you have received them or the time it takes to produce a product.
• Optionally set up parcel settings for raw materials.

Create a scenario

To start using the forecasting function you create a scenario.

When figures/quantity have been entered or estimated for the expected sales or supply, the numbers are saved in the relevant scenario.

You can create multiple scenarios with different settings.

You created a new scenario on the left by clicking Create Scenario.

Settings in the scenario

Example of short-term scenario

Example of (medium) long-term scenario

The Power Pack feature Cost Simulations

This is a supplemental guide to creating a scenario where cost simulations are enabled.

The Lookup of purchase prices feature in Cost simulations

You can choose from the following options:

• None: Looks at the average cost price, which is registered on the goods on previous orders, e.g. purchase price of raw materials and packaging.
• Lowest: Looks in the active price lists, where a price has been specified for the SKU, and looks for the lowest price.
• Highest: Looks in the active price lists, where a price has been specified for the SKU, and looks for the highest price.
• Average: Looks in the active price lists, where a price has been specified for the SKU, and calculates the average of the prices.

Hierarchy when calculating cost prices when None is selected:

The average cost price in the 1) recent quarter. If there are no goods that have been purchased/produced within the latest quarter, tracezilla will calculate the average based on the

2) last six months. If nothing has been purchased/produced within the last 6 months, the calculation will be based on the

3) recent year.

Sales forecast

In the sales forecast you can either

1) Enter the expected sales figures in the yellow row

2) Upload sales figures using the import template

3) Estimate the sales per customer based on previous sales figures and optionally including a trend

1) Enter expected sales

1. Select Sales in the top right corner.
2. Select scenario in the filter on the left.
3. Select Time Granularity day, week or month in the filter on the left.
4. Select Start day/week/month at the top right.
5. Select which products you would like to enter figures for in the Method for selecting SKUs filter.
6. You can enter expected sales for specific customers (optional). If no customer is selected in the filter on the left, the expected sales are generally registered.
7. Enter the expected sales figures in the yellow rows next to the SKUs (it is saved automatically).

2) Upload sales figures using the import template

If your customer is forecasting their purchases, it may be that they send this as a file to you as a supplier. In that case, you can copy the figures into the template to import sales figures into forecasting.

You can also download the import template after entering or estimating sales figures, in order to get an overview of the data in the specific scenario.

1. Select Sales in the top right corner.
2. Select scenario in the filter on the left.
3. Select Time Granularity day, week or month in the filter on the left.
4. Select Start day/week/month at the top right.
5. Select which products you would like to enter figures for in the Method for selecting SKUs filter.
6. Click Import in the top right. Then select Get Import Template.
7. A file is downloaded. Below you can see instructions for filling in the individual fields.
8. Once the numbers have been entered, the file is saved locally on the computer.
9. Go back to tracezilla and click Upload in the dialog window from which you downloaded the file.

Import demand forecasts

3) Estimate sales per customer

1. Select Sales in the top right corner.
2. Select scenario in the filter on the left.
3. Select Time Granularity day, week or month in the filter on the left.
4. Select Start day/week/month at the top right.
5. Select the customer for whom you want to estimate sales.

   You can also omit selecting a customer, in order to estimate sales in general for all customers. NB! Do not estimate sales for all customers in general and specific customers in the same scenario, as the sales figures for all customers already contain sales figures for the specific customer. You may risk getting artificially high estimates if this is done in the same scenario.

6. Select which products you would like to estimate figures for in the Method for selecting SKUs filter.
7. Select the period for which the forecasting function is to estimate above the results.
8. Click Estimate forecasts.
9. Select which period the estimate should be based on and thereby retrieve sales figures from the sales report.
   • Current forecast in the selected period: Used if some numbers have already been entered or actual sales orders have been created, on which you would like to calculate a trend.
   • Same period last year: Sales figures for the selected period the previous year are retrieved. If, for example, March 2023 has been selected, sales figures from March 2022 are retrieved.
   • Period of same length before selected period: If a period of e.g. 3 months February, March and April, tracezilla will retrieve sales figures from the three previous months November, December and January.
10. If relevant, enter a trend which must be added to the calculation of the sales figures.
11. Click Calculate.

Once the estimate for sales is complete, you can estimate the supply to identify which SKUs should be ordered/produced new supplies of.

See section Estimate supply below.

The table in the sales forecast

Estimate supply

You can estimate the supply, so tracezilla calculates the consequence of the estimated/entered/uploaded sales for your inventory.

tracezilla estimates supply so that demand is met and inventory is above reorder points.

The scenarios can be seen on the left. Click the blue button next to the scenario and select Estimate Supply.

You will receive the message: “A new estimate was requested!”. When the estimate is complete, you will receive a notification by email. A timestamp for the last performed estimate is displayed in blue text. When the estimate is in progress, it is displayed in orange text.

Create production orders and purchase orders from the forecasting feature

1. Select Supply in the top right corner.
2. Select scenario in the filter on the left.
3. Select Time Granularity day, week or month in the filter on the left.
4. Select Start day/week/month at the top right.
5. Select which products you would like to create orders for in the Method for selecting SKUs filter.

   If you would like to create a production order, you can specify Finished goods in the filter. If you would like to create purchase orders, you can for example select Raw materials or Packaging in the filter.

6. Select a period for which you would like to create orders for above the results.
7. Tick the boxes next to the SKUs for which you would like to create orders.
8. Click Create order and select the order type that you would like to create.
9. Fill in the order details. You can optionally enter a note on the order stating that it is based on forecasting.
10. Click Save. A draft order will be created.

Alternatively, you can create multiple purchase or production orders at once.

Then click Bulk create and then Purchase orders.

tracezilla will then create the purchase orders based on the SKUs that are below the reorder point in the selected period, and based on which supplier is specified in the partner relationship for the SKU. If several suppliers are specified, tracezilla will look in the price lists to see which supplier has the lowest price for the raw material in question.

The table in the supply forecast

More about estimating supply

When you estimate supply in forecasting, it happens in a background run. This ensures that the estimate is done faster, and you work with other tings in tracezilla in the meantime. You will automatically receive an email with the message “Forecasting succeeded” when the estimate is complete.

The “estimation engine” runs in iterations until there are no more SKUs that come below the reorder point or below 0. tracezilla runs up to 10 iterations.

You can view an estimation log, which tells you what data the calculations are based on and during which iteration this data was calculated.

You can view the estimation log by clicking the blue button next to the scenario and then Download Estimation Log.

More about the filters to the left of the results

More about shortcuts and settings in the forecasting feature on the supply page