SCP Demand Forecast CCH Tagetik
FinanceNovember 23, 2021

The art of the possible: Demand Forecasting in CPG

By: CCH® Tagetik

Read this blog to discover more about the Demand Forecasting in CPG industry.

The world of CPG is beyond competitive. After all, if consumers buy something regularly, it’s probably a CPG. There will always be demand for food, beverages, and household goods – right along with that is the constant competition born of rising bulk purchases, the shifting sands of supply and distribution chains, and greater power in the hands of consumers. The CPG industry is one of the largest markets in North America, and it is saturated with brands trying to push their products from completion to distribution and into consumers’ hands.

Making matters worse, CPG manufacturers are under constant pressure to be adaptable. CPGs operate on the edge more than any other industry, having to respond to unforeseen changes and trends in real-time. This can be tricky when supply chains are global, and an unexpected disruption halfway across the globe can rapidly impact the bottom line.

New product releases, demand shifts, and supply chains are easily disrupted. When CPG manufacturers fail to keep up, consequences are high because consumer switching costs are low. If one brand fails to meet consumer expectations, there are many more waiting to fill the gap. As a demand planner, knowing what to do and when to do it to stay ahead can be tricky. This is where demand forecasting comes in - providing the exact information needed to understand what’s possible, and keep ahead.

Demand Forecasting 

Demand forecasting is the process of taking known data from across the supply chain and conducting statistical analyses to predict future trends. By using scenario planning, possible outcomes can be researched so planners can make better-informed decisions. Data is produced throughout the entire supply chain. Demand forecasting takes that data and delivers insights that planners can use to shape your strategy and decisions. Industry leaders agree that supply chain analytics and demand forecasting are not only critical-path for CPG success, but also must-have business intelligence tools across every industry.

Demand Forecasting in CPG 

For a myriad of challenges within CPG, demand forecasting can help. Whether your organization needs to streamline, relocate resources, or find alternative sources and products to pivot around disruptions, demand forecasting can provide the insights needed to make trusted decisions.

Inventory Allocation: Getting products on store shelves - virtual or otherwise - is the only way to make sales. However, knowing how much inventory to send and to which retailers and locations can be tricky. Brands do not want to sell out at a location while having inventory build at another warehouse incurring storage costs. Or worse, creeping closer to spoilage or an expiration date. Demand forecasting can identify trends to help planners predict how much inventory is likely to be sold at various locations, considering seasonal trends, recurring events, and many other factors.

Planning: Early in 2020, the US economy was on solid footing. Three months later, the picture changed when the stock market plummeted and unemployment swept the globe due to COVID-19. For CPG manufacturers, consumer demand was not going anywhere, but consumer behavior and supply chain availability were heavily altered. Organizations in every market had little time to react to such an unexpected global event. Demand forecasting helps ensure adaptability and agility – regardless of uncertainty. The right demand forecasting platform enables planners to derive multiple, rapid forecasts to test various scenarios and make dynamic, informed decisions. Disruptions cannot always be avoided, but they can be mitigated.

Adapt to Variation: Even without a global crisis, CPGs need to adapt to changing products and evolving consumer demands. SKUs change, current products are improved, and new products are constantly being released. All these factors add complexity to an already complex supply chain. Managing the variety of data is challenging enough; keeping up with the constant changes and options is even tougher. A solid forecasting model makes all the difference. 


Demand planning may seem difficult to do quickly and efficiently, but it does not have to be. The availability of data and the power of cloud computing mean that demand forecasting can be used as a tool to deliver value for CPG companies and retailers … and across industries too. To learn how you can use a trusted demand forecasting solution like CCH® Tagetik Supply Chain Planning to enhance your business, get a demo today.

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