Improve Your Supply Chain with Demand Planning
From crystal balls to tarot cards, we humans have tried everything to take a sneak peek at the future so we can prepare for what’s ahead. We haven’t had much success except in one realm: business and supply chain.
Forecasting is an important supply chain practice. Companies worldwide use it to predict business growth based on past performance and present market conditions. One of the most important forecasts is demand planning. Accurate demand planning enables businesses to remain profitable and avoid anticipated future obstacles.
In this article, we will explain what demand planning is, why it’s important, and why your business needs it.
What is demand planning?
Demand planning is the process of forecasting your future demand based on your historical sales data and trend analysis. Businesses use demand forecasting and supply planning to manage their supply chain with accuracy and ease. Demand planning is a crucial prerequisite of a successful supply chain planning and optimization process.
Forecasting your demand with 100% accuracy is impossible. That’s why most businesses today rely on accurate demand planning software to take a look into their future performance, make smarter business decisions, and manage their supply chain to enhance profits.
Why is demand forecasting important?
Demand planning is one of the most important aspects of supply chain optimization for businesses. Accurate forecasting enables you to analyze how demand is changing over time and how that affects your business, so you can make smart, data-backed decisions regarding inventory, marketing, finances, supply chain, and more.
Businesses use market analysis to reduce lead times and provide better service to their customers at lower cost. They can determine influencing factors and make smart business decisions. The data enables the planning of new product launches and pricing strategies to stay ahead of the competition.
Benefits of demand planning
Demand planning and forecasting is one of the most basic and important steps of supply chain optimization. It enables you to increase profit by ensuring product availability and maximizing revenue while minimizing loss. Demand planning adds value to your entire supply chain. Here are five of the most significant benefits.
· Avoid Losing Sales to Stockouts
One of the most important benefits of demand planning is avoiding stockouts. With accurate forecasting, you can determine inventory levels based on estimated demand, thus avoiding stockout scenarios. You can also plan how your inventory needs to be segregated based on location-wise demand patterns.
· Reduce Inventory Waste
Accurate demand planning also enables you to keep on hand only what is needed, thus avoiding inventory waste or deadstock. This is especially beneficial for perishable products. Save on inventory space, reduce warehousing costs, and optimize your safety stock to decrease wastage while ensuring availability.
· Improve Inventory Management
A demand planning system assists in overall inventory management for your business. Use your projected demand to manage production and ensure that you have the right products in the right places at the right times. Reduce your lead times and provide better customer service.
· Determine Demand-Altering Factors
Demand planning enables you to monitor your product performance over time and use this data to analyze how demand for your products is changing and why. Determine the factors that affect demand with market and trend analysis, and then use those insights to plan promotional efforts during anticipated periods of low demand and increase inventory during high-demand seasons, always ensuring maximum profit.
· Delight Your Customers
Delighted customers lead to long-term business success. Use demand planning to stay ahead of the competition and anticipate your customers’ needs and wants. Delight your customers and enhance your brand’s reputation by providing the products your customers want, where they want them, when they want them.
The best way to plan demand
Traditionally, demand planning can be done manually using various quantitative and qualitative methods. Spreadsheets have served this function for a long time. But in today’s complex and rapidly changing environment, spreadsheets are no longer up to the task.
That’s why most brands today rely on Demand Planning Software to accurately plan demand and maximize profit. This software automates the demand planning process to provide an accurate forecast within minutes, saving businesses time, money, and labor.
Choosing the right software
With so many options in the market, it can be hard to choose the right Demand Forecasting Software for your business. Every company has its own particular needs, and it is important to choose a system that aligns with your business goals to obtain accurate results.
One of the best demand planning software solutions for SMEs and industry leaders is provided by Avercast, a SaaS+ company. Using 250+ algorithms, Avercast’s Demand Forecasting Software predicts demand for up to 5 years in the future with up to 99% accuracy. Perform event forecasting, seasonality and trend analysis, point-of-sales forecasting, and more. Accurately forecast demand, boost revenue, make smart decisions, and enhance the bottom line. Speak with a Avercast supply chain expert to understand how Demand Forecasting Software can help your business thrive.
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