Forecasting trends is easy if you’re dealing with a well-established product: you look at the historical data. But one trend we are stuck with is a high turnover in products. Customers constantly demand innovations and new variants. So some of your inventory will have no historical data and forecasting demand is much tougher. It is likely these same difficult products will get you the best margins.
In summary: new products yield better margins but it is difficult to predict demand. If you don’t get your forecasts right you’ll either be left with expensive stock you cannot sell, or unhappy customers you cannot supply. Margins disappear. You simply have to forecast demand accurately, especially when it’s tough.
Fortunately, Demand Planning does just that. It gives you much more than historical trends. You get better answers even when you analyze new products, or products with large variations in demand.
The software works in real time, collecting sales information centrally, and allowing you to plan with the most up-to-date figures. It is integrated with automated purchasing so you can react quickly to changes in demand.
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You can base your plan on the historical data of other similar products, taking into account how demand looked when they were new.
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You can build price, cost value, shape and size into your forecast.
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You can base your forecasts on the performance of products, across a range, by industry type or even according the sales person responsible.
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You can aggregate forecasts based on different criteria. It gives you a good overall figure and allows assessment of other forecasts. Any large deviations from the aggregate figures give you a better overall forecast.
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You can include knowledge of how your big customers will respond to a product.
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You can build-in information about sales and marketing to see how a promotion or discount might influence demand.
Multi-dimensional forecasting
Demand Planning allows you to forecast by looking at the information in different ways:
By market: country, region, customer or industry sector
By time: months, weeks or days
By production: families or groups of products, or by individual item.
The information that Demand Planning produces will obviously make your inventory management more accurate. But it can also be used to plan sales campaigns, to create sales budgets for financial management, and for operational management to spot potential capacity problems or shortages.
Demand Planning works with Planner View to provide simple graphical reports.