AI-Powered Demand Forecasting: Put it to the Test
October 25, 2023
by Kristin Brennan
Accurate demand forecasting is the bedrock upon which optimized schedules are built. The landscape of technology in this domain has rapidly transformed from traditional year-over-year models to AI-powered forecasts. These AI-driven forecasts have the remarkable ability to automatically analyze thousands of operational data points and incorporate external data such as weather patterns and local events. They produce precise demand forecasts that autonomously adapt to your business, ensuring highly accurate predictions in the face of ever-changing business conditions.
Pioneering AI Technology at Legion
Legion’s foundation is rooted in AI technology. Our mature data science infrastructure has been in operation for over five years and is designed to make AI accessible to all, eliminating the need for a large team of data scientists. Legion has been recognized with prestigious awards, including the AI Breakthrough Award and the Enterprise Artificial Intelligence Excellence Award. Legion Demand Forecasting precisely predicts demand across all customer touchpoints and locations every 15 minutes—using past, present, and future events.
The Pitfalls of Inaccurate Demand Forecasting
The repercussions of inaccurate demand forecasting are substantial, including lost revenue, inflated payroll costs, and heightened stress levels within your organization. Before adopting the Legion platform, organizations participating in a Forrester TEI study relied on outdated workforce management (WFM) systems that weren’t user-friendly and did not have accurate forecasting. Manual workarounds were necessary due to the absence of automation, resulting in inaccurate labor demand forecasting. Even those in the study with legacy WFM solutions struggled as these systems required labor data to be manually imported, exported, and edited weekly. Companies without any forecasting solution relied on managers’ intuition, which often proved ineffective. These discrepancies between planned and actual labor translated to financial losses, increased payroll expenses, and elevated stress levels among managers and employees.
5x ROI with Legion Demand Forecasting
The Forrester TEI Study revealed that Legion Demand Forecasting can yield a remarkable 5x return on investment. Organizations in the study achieved an astounding 95% forecast accuracy. A company with 10,000 employees transitioning from a legacy WFM system anticipated savings of $6 million over three years by optimizing labor expenditure through improved demand forecasting accuracy. Organizations can automatically generate an optimal labor plan, ensuring the right type and quantity of labor is scheduled at the right time. A 1% improvement in demand forecasting accuracy is estimated to lead to a .5% reduction in labor costs. That savings alone can fund a demand forecasting or workforce management replacement project.
This testimonial from a Director of Workforce Management at a National Discount Retailer illustrates the benefits: “[Legion] enables us to allocate labor more efficiently and accurately. This stems from two key factors: a superior forecast through machine learning and the ability to flexibly redistribute workloads. We can reallocate labor effectively, enabling more efficient scheduling and ensuring that labor reaches the right store on the right day at the right time.”
Put Vendors to the Test
While customer success stories are compelling, the proof of demand forecasting accuracy is in the data. At Legion, we can demonstrate our forecasting prowess within just 48 hours. To select the right vendor for your demand forecasting needs, you must put them to the test. Challenge them to prove the accuracy of their forecasting within one week. To do so, you should provide:
- Data for 10-50 locations to ensure a statistically representative sample
- Three years of historical data for your desired demand drivers at 30- or 60-minute intervals, excluding the most recent two months for comparison
- The geo-locations or addresses for all locations included in the proof of value
This data can encompass metrics such as store traffic, sales transactions, sales volume, punch/shift data, custom events, and sales promotions. With your historical data, Legion can provide a forecast within 48 hours to compare against your current solution.
Ready for the challenge? Take our Demand Forecasting Accuracy Challenge today and put your current solution to the test.