Forecasting — we’ve all heard of it. But what exactly is it? How does it work? And why is it so essential for a successful contracting strategy?
For defense contractors, production forecasting is a crucial step to take when determining production goals. Global conflict, defense budget adjustments, or shifting acquisition needs, could potentially upturn a supplier’s strategy. But a well-executed forecast can turn market upheaval into opportunity.
Read on to discover what factors go into developing a forecast and how you can use forecasting to boost your market share.
With over 50 years of experience, no one knows defense forecasting like Forecast International. To learn more about the science of forecasting, download their free guide.
What is forecasting?
Production forecasting is the process of evaluating the future demand for products and the future availability of resources needed to create those products.
First and foremost, the forecasting process involves collecting and analyzing a vast amount of data and intel. This information is then used to ascertain market trends, perform competitive evaluations of specific platforms, and ultimately develop and refine production forecasts for those platforms.
In the aerospace and defense industries, forecasting projects how many of a certain item will be built over a particular period. Production forecasts are a key component in any decision regarding the possible expansion of production capacity, often a difficult decision for both OEMs and suppliers. Forecasts can also reveal how an entire market segment, like military vehicles, will evolve over that period.
Here are a few ways you can implement forecasting into your market strategy:
- Plan and optimize for future production. This is the obvious answer, but there is no denying that effective forecasting can make it much easier for your team to reach their production and sales goals. With an accurate forecast, you can implement more efficient systems or streamlined production processes.
- Scope out the competition. You can compare the production forecasts for competitors in distinct market segments to see how each is expected to perform.
- Make a secure estimation. If you make a component for a specific platform, you can use a production forecast to judge how much material or labor will be required to fulfill orders over a certain period.
- Expand your reach within the market. Discover gaps in your industry that you can fill, or find out how you can pivot into an entirely new defense market.
- Lean on the experts. Forecasting is no small feat, and it often saves time and money to rely on knowledgeable analysts (like the team at Forecast International) to do the job for you.
Production forecasting is a trusted tool for some of the biggest global defense contractors. Take the guesswork out of forecasting by downloading Forecast International’s free guide, or exploring their groundbreaking solutions.