Mémoire-projet

Abstract

The question I set out to answer in my master's thesis is: What demand (sales) forecasting strategies are used by b-to-b companies, and what impact do these forecasts have on their production and sales strategies? I have chosen to answer this question because, firstly, it will be beneficial for my host company to discover which demand forecasting and production strategies are the most effective or relevant for solving its problem. What's more, this is a problem that other companies may encounter, as explained below. From several studies, we can learn that demand forecasts are essential for managing supply chain activities, but it is difficult to determine these forecasts when part of the information is missing. Many traditional and advanced forecasting tools are available, but their application to a very large number of customers is not manageable. The global market for demand forecasting software is expected to reach $8.68 billion by 2030, with a compound annual growth rate of 10.3%. Demand forecasting is therefore an important issue for companies that continue to invest in forecasting tools. Moreover, the demand forecasting strategy is not confined to a single sector. In today's business world, characterized by intense global competition, cost management is an important strategic weapon. External purchases of products and services generally account for over 50% of total costs. Significant savings can be made by effectively selecting suppliers and determining the optimum quantities to order. Existing cost management tools focus on streamlining production and distribution activities, and do not take into account the purchasing function. According to the survey I conducted to answer this question, it appears that there is no miracle forecasting method that can be applied to all companies. There are two kinds of forecasting methods: quantitative and qualitative. The qualitative method is preferred by companies that need to make medium- to long-term forecasts. This method is also of interest to companies who want to make strategic choices, and whose future demand structure is affected by political changes or technological advances. The quantitative method is preferred by companies with a well-furnished historical database, who wish to predict future forecasts on the basis of past forecasts. This method can be used for both short- and long-term forecasts; it simply needs to be adapted to the chosen technique. The choice of production strategy must take into account not only the forecasts made, but also the particularities of a company's production. For example, if a company has a product with complex, time-consuming manufacturing processes, it should consider building up a buffer stock to meet demand in the event of production problems. It is also essential for companies to keep a safety stock of their raw materials, in order to always be able to meet customer demand. The company can also adapt its strategy to products where it knows the quantity to be produced, by deciding to produce everything in one order. This is useful for parts with complex, low-cost processes. It can also decide to wait to receive an order for parts for which it no longer considers there will be much demand. Finally, companies use the following sales strategies: If they see that they are not going to reach the forecasts estimated with their growth indicator, they will offer rebates to increase the quantities sold. They will also take part in trade fairs to attract new customers. They will encourage their sales responsible to create a lasting relationship with the customer, in order to build loyalty and gain a better understanding of the customer's purchasing expectations in the years to come. They will also contact customers on a regular basis to ask them about their satisfaction and to present the company's new products.