With the new year ahead of us, we tend to start thinking of what 2017 will bring us and our businesses. Among the new foresights for 2017, we see the presidency of Donald Trump in the USA. A lot of assumptions over his ability to govern, as well as regarding the implications of his administration have been formulated, including a lot of doom-mongering…
Trump will influence and affect the global economy. If we think of Mexico, the republican president to be, has spoken of his averse of the NAFTA (North American Free Trade Agreement) and his intention to renegotiate the agreement. Not only has he implied changes on trade agreements with Mexico, he also wants to revisit import tariffs for Chinese products into the US. This makes us conclude that we need to be prepared for Trump’s geopolitical and economical decisions. Baring this in mind, multinationals will have to take this type of decisions and scenarios into account when revising their supply chain network.
Leading Indicators help you better steer your business in 2017
So how can global businesses best prepare for big changes that might be instigated by this new political landscape that will inevitably affect global economy? Instinctively our recommendation would be to keep a close eye on global macro-economic indicators, which influence your business and are able to indicate what direction your business may take. Finding out what macro-economic indicators are important, will not only give you strategic value, but will also help you improve your demand planning by making your sales forecasts more accurate.
At Solventure LIFe, we have helped a lot of companies finding their macro-economic leading indicators. By finding those indicators we have seen how better business decisions have been made, and how sales forecasts have been improved. Start preparing for 2017, and consider the following:
Where to look for matching leading indicators?
Look at data from various databases, and see if they match your sales history. How do these leading indicators correlate with your sales data? Keep attention to the leading value they carry. Are they leading your sales data by 1 month or by 5 months?
How to select leading indicators for business use?
Based on the above exercise, check which leading indicators are most relevant, stable and thus valuable to use for operational activities and business decisions.
How to match these indicators with my sales?
Start operationally using these leading indicators, not only for strategic decisions, but also to improve the sales forecast. Make the forecast more accurate by taking the cycles of the indicators into account, to predict how your sales cycle will look like.
Looking for more information? Register for our webinars and learn more on how to use external data in your business processes.
Ready for 2017?