Demand Planning Software: Going Beyond Demand Forecasting
Why do you think airplanes are the most effective modes of travel? The answer is based on the primary difference between distance and displacement. The shorter the distance you travel in less time to reach your destination, the more effective it is. Similarly, there are many ways to get to your targeted sales or revenue numbers. However, getting assistance from demand forecasting software would make it more effective.
Business forecasting is a more innovative way to determine your demand for the future, and demand forecasting software does it efficiently. But that's not the only challenge that your supply chain may have. Various brands face difficulties in making the right plan after and before production. Many companies find it challenging to reach their customers at the right place and at the right time. Mainly because they still need to streamline their supply chain. This results in losing customers and bleeding profits.
Having excess inventory is also a significant concern. It’s like a double-edged sword; storing goods in a warehouse for too many days can make products obsolete. Additionally, you are paying extra money to maintain the storage facility. You’ve tied up your capital in maintaining a warehouse, which you could have used to grow your business.
Businesses have turned towards business forecasting to resolve these challenges and operate more efficiently. Demand planning and forecasting software is highly recommended to gain more impactful and accurate projections. Read on to learn more about demand forecasting.
Learning "What" and "Why" of Demand Planning & Forecasting
The fundamental definition of demand planning is reaching and maintaining an equilibrium stage with your supply capabilities and customer demand. Demand forecasting, on the other hand, is a way to determine the future projection of your product so that you can maintain inventory to fulfill all the demand. In ideal scenarios, businesses strive to reach a state where they have the inventory to meet all the demand, neither more nor less.
Critical Elements of Demand Planning
Demand planning is not just about forecasting demand; it goes way beyond. From sensing day-to-day demand to making marketing strategies to lure more customers, it passes through an extensive plan to foresee the demand for the product and contribute to the planning of selling them. Here are some vital elements of Demand Planning:
Demand Prediction: This means forecasting demand using historical data. Businesses use various methods, algorithms, and forecasting software to determine the projection. The prediction accuracy depends entirely on the data, making data validation essential.
Demand Sensing: It is a way of using external factors combined with internal data and determining the alteration in demand. These external factors are weather conditions, pandemics, global events, and economic trends. Sensing changes and responding fast will be the final differentiating factor.
Managing Portfolio: From laying a blueprint for the product's initial introduction to its discontinuation, demand planning serves a broad role in the product life cycle. There are many products whose sales are interlinked with other products like earphones and mobiles, spare parts and cars, beds and mattresses, and so on. The best demand planning software considers all the fluctuations while projecting demand.
Marketing & Promotions: Advertising and offering discounts is the bread and butter for businesses to allure customers. Hefty money and effort are spent every year to acquire more customers. And to sense every slight fluctuation and prepare for an influx of product demand, planning software is used.
It started with a spreadsheet and has come to advanced software including demand planning tools. While spreadsheets are still a widely used means of forecasting and planning, it is not accurate. Our demand forecasting software integrates with your ERP easily. It automatically fetches data and uses more than 250+ advanced statistical forecasting algorithms to make accurate projections.
What's stopping you from transitioning from error-prone spreadsheets to the best demand planning software, Avercast? Get in touch with one of our supply chain experts and sense the difference yourself.
