A cross-functional process that not only proves to be of immense value for a business but also plans for the future. Demand planning goes one step ahead in fulfilling customer's demands for several products. It is done by focusing on stabilizing the excess inventory and avoiding unwanted disruptions in the supply chain.
Furthermore, demand planning should not be done unsystematically; rather, it must be a continuous process unless ingrained in your business, your business will undoubtedly struggle to flourish. Fortunately, the significant advancements in technology have made it possible for businesses to achieve this goal.
The supply chain process of a particular business plays a vital role in determining the overall success and failure. Businesses that have embraced and incorporated big data analytics when it comes to demand planning have registered unprecedented growth. The trend continues to provide real-time solutions for businesses through demand planning strategies.
Three Questions to Address Before You Begin
Demand planning is an inherent process in supply chain management that assesses the current and expected demand to formulate a precise forecast. Creating an effective forecast entails unprecedented benefits for the business such as accurate budgeting, efficiency in the supply chain, etc.
However, before your business embarks on its demand planning process, addressing below mentioned questions is equally important:
What kind of products does your business usually deal in?
Have you assessed the current location of your products?
Has your business figured out the current pattern of your products' demand?
The chances of inevitable success get doubled if you have concrete and substantial information to begin with. The more you're aware of the current trends, the higher the success rate will be.
The Benefits of using a demand planning tool are highlighted below:
1. Significant Accuracy in Forecasting
Demand planning lays a rigid foundation for the business in its entirety. It helps the supply chain managers to execute proper forecasting that generates projected revenues. It further provides vital insights into the demand as well as the revenue.
A colossal entity of E-commerce, Amazon does impeccable demand forecasting that helps them maintain their efficiency. Amazon assesses the buying pattern of its customers and holds the stocks accordingly. The warehouses store those products which are frequently bought by the customers. It incorporates the historical data of its customers and products they usually prefer buying through the platform. It helps Amazon to successfully preserve the demand of its customers without falling short of supply.
However, formulating a perfect forecast of demand can be daunting for businesses sometimes. Therefore, it has to be done with utter proficiency, and the patterns must be studied profoundly to gain a fair view of the future demand.
2. Comprehensive Budgeting
When a business is able to hone the skills of demand forecasting, it eventually leads to precise and accurate budgeting. A master budget can be developed by the use of information garnered from sales forecasting. It provides a holistic view of the finances and expenditures of a business. Furthermore, a concrete budget can be allocated for overhead, marketing, labor, cash flow, and manufacturing. It will significantly ease the process and, if carried out systematically, can yield promising results.
In case your business is able to formulate a flexible budget, it gives an opportunity to shift and channelize desired efforts depending upon slow or peak periods.
3. Intuitive AI Delivers Significant Insights
If you make precise predictions and analyze the market when your business is likely to receive the maximum sales, it will perform significantly better. It will further help in planning the process of production, warehousing as well as essential shipping schedules. This is precisely where Intuendi has registered considerable advancements.
Intuendi helps its customers to estimate inventory needs. It further gives a fair view as to what and how much to buy and store the products. Intuendi's intuitive AI helps to cut dozens of hours a week that used to be exhausted in analyzing the data manually. Intuendi has paved the way for businesses to save thousands of dollars a month in just software costs.
Some of the predominant features of Intuendi include:
- Demand Forecasting
- Inventory Optimization
- Purchase Order Management
Demand forecasting is normally done through an Artificial Intelligence engine and delivers significant insights for the growth of your business. In addition to this, inventory costs can also be minimized, and substantial capitals can be unlocked, which were previously held by an excess stock. Availability of stock in-demand improves considerably, which raises the service levels through determining the items in overstock and assessing the stockout risk.
The exclusive customizable platform offered by Intuendi to boost your business growth is highly customer-oriented. It sails way past its competitors in the likes of SAP, NETSTOCK, Oracle Demantra, etc.
4. A Profound Look Into The Inventory
Businesses can prosper effortlessly only if demand planning is carried out with utter consideration. It can contribute to managing the inventory levels so that they are aligned with the fluctuations in demand. If the manufacturers incorporate effective demand forecasting strategies in tandem with actual demand, it will allow them to store required items in stock.
It will ensure proper supply without any unwanted gaps, and customers can be facilitated with such products when the demand surges. It will also help in maintaining the required stock and not exceeding it beyond necessary in case of a plunge in demand.
Therefore, demand planning tools are imperative for any business to facilitate accurate forecasting and to operate according to it. The benefits can be leveraged for an extended period of time if it is executed with significant research. It is a vital tool for manufacturing operations that usually aim for minimizing their costs and managing delivery on time. Producing only what is necessary and in-demand can go a long way to conduct a thriving business.
The accuracy and validity of the business rely heavily on these tools, and the strategic role that Demand Planning plays is unmatched in terms of efficiency. So, there! It's all you need to know to begin with some smart forecasting strategies to strengthen your business.