E-commerce now a boon for demand forecasting

27 September 2010

28 September 2010 | Lindsay Clark

A firm trying to improve demand forecasting in its supply chain is giving its customers free software tools and a social networking service to help predict orders.

Electrocomponents, which manages the delivery of half a million products in 27 countries, specialises in fast-turnaround of electronic and engineering components at low volume. Like many firms in the manufacturing sector, it has been struggling to forecast demand through recession, then rapid recovery since the beginning of 2009.

The firm has re-evaluated its demand forecasting since it moved suddenly from a 17 per cent fall in demand to 25 per cent growth.

Sales-side e-commerce had previously been seen as hindering demand visibility, but now the firm is finding ways of using the internet to improve forecasting.

Anne Bruggink, general manager supply chain at Electrocomponents, said: “E-commerce meant we got flooded with last-minute orders. This was not good news, as we did not even talk to the customer. But we were wrong; you can do it with the technology we have today.”

As a free service to customers, the firm now provides design software such as a “component chooser”, which helps electronics developers build new products. “Even if customers do not buy anything, we know what they are looking for,” Bruggink said. This in turn helps improve its forecasting, he added.

Electrocomponents, which owns brands RS, Radiospares, Radionics  and Allied Electronics,  is also offering social networking software to help understand which products it should buy. “We have got a dialogue on the web to find out what people need” Bruggink said.

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