Volume Forecasting
Table of Contents
Effective fulfillment relies on thorough preparation. Each month, we ask that you provide us with a volume forecast for each facility, outlining your projected order volume for the upcoming month. The operations team will prepare to fulfill that number of orders each day and ensure that we have the labor capacity to get them out on time.
By providing us this data, combined with Brandfox's historical data, we are able to optimize our operational efficiency and fulfill orders effectively. However, we know there are unforeseen volume deviations that can occur.
How to Submit a Forecast
Step 1- Use the Client Forecast Template to log your forecasts for each warehouse for the upcoming month.
Step 2 - Submit the completed volume forecast to your CS Manager on or before the 15th of each month.
Don't forget that you will need a volume forecast for each warehouse. If you are just in one warehouse, you will only need one forecast. But if you are in both East and West, please be sure to submit two separate forecasts.
Determining Forecast
A lot of forecasting is based on historical data. If you are a new business or have new products that don't have much sales data, there are still steps you can take to develop a thoughtful forecast.
eCommerce Order Volume
For orders, begin by looking at your monthly order volume from the last few months and think about a couple key considerations:
- Has your order volume been increasing by a certain percent month-by-month? If there is a consistent increase, it is reasonable to assume this will be similar in the following month.
- Do you have any sales or promotions planned? Sales and promotions will likely lead to a higher than normal volume. The volume increase may only be for a set number of days so be sure to communicate that as well so our team can adjust accordingly.
- Are there any backorders or presales with an incoming ASN? If we are expecting a delivery for pending backorders or presales, the orders will drop when the inventory is received. This will cause a jump in order volume for the day the inventory is received.
Wholesale Order Volume
Collaborating with your retail partner to provide wholesale volume forecasts is essential. Here are some ways to encourage collaboration:
- Regular Communication - Maintain open lines of communication with your retail partner with regular meetings or touch bases to discuss upcoming promotions, marketing campaigns, or anything that will impact order volumes. Sharing this information in advance allows your retail partner to anticipate demand and adjust accordingly.
- Historical Data Sharing - Sharing historical data with your retail partner helps them analyze trends and make accurate forecasts in the future. This is especially important for seasonal products and promotional periods.
- Forecast Accuracy Improvement - Work with your partner to continuously improve the accuracy of your volume forecasts. Conduct regular reviews to assess the forecast accuracy against sales and identify factors that could have caused the variance. By reviewing forecasting methodologies, you can refine your future volume forecasts, which benefits both you and your retail partner.
- Forecasting Tools - Explore the idea of using shared tools or platforms that allow real-time visibility into inventory levels and sales data. These tools allow both parties to assess and analyze data simultaneously. This facilitates better coordination and decision-making when it comes to volume forecasting and inventory planning.
ASNs
Knowing exactly when an inbound shipment will arrive at Brandfox can be challenging, but there's still plenty of information that can help us prepare. Here are some key points to consider when anticipating inbound ASN volume:
- What am I expecting to be delivered during the month?
- Assuming there are no delays, what would be expected each week?
- Are there any backorders, presales, kitting, or other projects that are pending this ASN?
Kitting & Other Special Requests
Communicating any other projects you are anticipating allows your CS Manager to start preparing and proactively answering any questions they anticipate. Knowing how your projects relate to orders and incoming ASNs allows us to be strategic in planning projects across both warehouses.
Brandfox's Data
Brandfox works diligently to collect data, streamline operations, and highlight trends. The internal data we collect is used in conjunction with the forecast you provide to make informed decisions.
When all of the data is reviewed and forecasts are established, your CS manager will go over the daily forecast breakdown with you. The forecast you are presented may vary in comparison to the forecast that you submitted. These variances are attributed to the combination of your forecast and Brandfox's. The final forecast must be agreed upon by both parties.
Failure to Submit a Forecast
If forecasts are received after the designated deadline or not provided, there may be penalties affecting your Service Level Agreements (SLA). Brandfox requires you provide your forecast on time so we can properly allocate labor and resources. Our team will notify you if we believe your forecast is over or under based on historical data and work with you to align on the final forecast.
SLAs will not be applicable for the days impacted by a late forecast submission or for months when no forecast is submitted. This means we can't guarantee specific service levels during this these time frames.
Late Forecast Submission
Forecasts must be submitted on or before the 15th each month to allow a two-week window for data review and staffing updates. Forecasts submitted after the 15th will have a two-week delay before they become applicable.
For example, if you submit your forecast 3 days after the 15th, your SLAs will not be applicable for 3 days in the following month. This is to ensure the Brandfox team has the full two weeks to review the data and allocate labor accordingly. Two weeks after the day your forecast is submitted, your standard SLA will be applicable again.
No Forecast Submission
Brandfox will rely on their own historical volume data in any months where no forecast is submitted. During that time, Brandfox is not accountable for any SLAs specific to the missed forecast.
Inaccurate Forecasts
What happens if I am under my forecast?
If volume drops below the forecast for 2 or more days, we will adjust the forecasted volume and align our staffing accordingly. Your CS Manager will keep you updated about these adjustments to ensure clear communication.
What happens if I go over my forecast?
In this example, let's say you have forecasted for 100 orders per day but there are 200 orders that need to be fulfilled on a Monday. Brandfox will fulfill 100 orders on Monday, then you will have a few options:
- Communicate with your CSM to approve overtime fees for additional labor/hours to get the orders out as quickly as possible.
- Have the 100 orders that were above your forecast wait in the queue until you have a day with less orders and the team has excess capacity to ship those orders. The orders flowing into the "Today" profile will keep the same queue management as a normal day. The operations team will be playing "catch up" until all of the orders are fulfilled.
- Have the 100 orders that were above your forecast slide into the "Today" profile on Tuesday and/or the orders with the soonest SLA will be moved into the "Today" profile. This will then leave the leftover orders waiting in the queue for a day with less orders coming in. Essentially, this will be using FIFO method until orders are caught up.
Reach out to your CSM to help create a recovery plan! While we can't promise orders above your forecast will get out immediately, we will work proactively to help get priority orders out.
Orders above the forecasted amount will not be subject to your normal Service Level Agreement (SLA). The duration of time it takes to recover the orders above your forecast depends on the volume and specific circumstances, but we will work diligently to minimize disruptions to your business.
Reach out to your CSM with any questions you have about forecasting expectations.