We all know the feeling: finding a product on Amazon (or looking at your favorite brick-and-mortar) only to see it’s unavailable or out of stock. It’s a common problem for consumers, yes, but an even larger issue when it comes to supply chain management software. The answer? Demand planning software tools.
Demand planning software solutions bring the power of forecasting into a company’s processes. Ultimately, these tools let you serve your customer base more effectively by planning your production and inventory in advance instead of reacting to market shifts at every turn — a vital part of business success. After all, you can’t bring in revenue and keep the lights on unless you’re consistently meeting consumers’ needs in a timely manner.
So, how do you know which solution will give the best ROI for your specific needs? What are the top options on the market?
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Grab your favorite Starbucks drink (or Kombucha, if you’re like me) and settle in as we look at the big picture and then drill down to the best solutions and what they offer. Here’s the roadmap of what we’ll cover:
Demand Planning 101
Demand planning creates reliable forecasts for company use, making it a critical component for supply chain planning. However, demand planning goes beyond the statistical aspect, which differentiates it from demand forecasting software. The steps of the process include the following:
- Form a team, usually from sales, operations and tech
- Aggregate and review the historical data for statistical forecasting
- Include new data, such as customer orders, and revise the model and forecasts accordingly
Demand planning and demand management are similar, but think of them as siblings instead of twins — related yet different. Demand management software deals with short-term supply and demand issues. On the other hand, demand planning takes the long-term view into account. Using predictive analytics, it helps decision-makers look forward to future demand instead of keeping their view limited to the present.
Equipped with this information, your business will be more prepared to handle upcoming market needs by having enough stock on hand. The result? An increase in sales thanks to the ability to meet the demand.
Demand planning is often a particular feature of an encompassing package for supply chain management (SCM). Why SCM? Because when the raw supplies come to company locations, the company keeps them to manufacture the products they’ll deliver to customers when demand occurs. Since demand planning gives you a better understanding of what will be ordered in the future, it can help improve the supply chain process.
Your company can take significant advantage of this form of business intelligence by using demand forecasting and planning to generate better product life cycles and ROI.
Now, let’s get detailed for a minute with planning and forecasting software. First up, trends.
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Trends You Should Know About
The supply chain is a complex, interconnected web of technology, processes and people. And at the center of it all, a never-ending flow of data acts as the engine. Operating a business without data intelligence is the modern equivalent of piloting a Boeing 747 through a storm with the instruments not functioning — you’re flying blind.
This is why over 80 percent of manufacturers consider real-time monitoring a crucial part of their success. It provides context for the data and gives insight into things like product quality and machine performance while revealing problem areas. Such visibility helps keep your business flying high.
Knowledge Sharing Networks
That’s a pretty jargon-stuffed phrase, but basically, knowledge sharing networks are the result of integrations across BI, analytics, track-and-trace applications and quality management. Combining on-site legacy systems with 3rd-party and cloud applications creates a platform that allows supplier connection, along with greater speed and scalability.
The amount of data at our fingertips underpins the importance of collaboration across all aspects of the supply chain. Data reliability and accuracy are important, but in order to reduce costs and waste while improving results, companies also rely on data that provides a single version of the truth and that can be shared freely.
To be most effective, collaboration should involve every department across an organization, along with retailers and suppliers.
AI and Machine Learning
The presence of AI has become as common as sliced bread, and by 2022, its global business value will reach almost $4 trillion, according to Gartner. Though it, along with machine learning, has yet to receive widespread adoption in the supply chain industry, that’s on track to change.
And no wonder, given the capabilities AI and machine learning present:
- Contextual intelligence, which cuts costs and inventory while speeding response times
- Improving operations such as factory scheduling
- Forecasting warehouse order arrivals and departures
- Insights into SCM performance
- 360-degree view of the supply chain
As mentioned in our post looking at trends across the entire supply chain, cloud systems are poised for greater use moving forward, as companies overcome concerns regarding security and uptime that come with 3rd party vendors having access to software.
Another factor is globalization. With worldwide supply chains to manage, companies need easier, more effective ways of standardizing processes. Cloud solutions are a practical answer.
What Does Forecasting Software Do?
A critical part of demand planning is creating forecasts. To make your plans a reality, you need powerful software with the ability to process huge volumes of information. You can’t conjure inventory and resource forecasts out of thin air — they have to be based on data.
How do you get these insights? Software solutions with forecasting like business intelligence tools allow you to remove and isolate data from reports, reviews, metrics and surveys. You can then turn the results into actionable statements. If there’s a peak buying period for a certain demographic, for instance, demand planning and forecasting software can analyze thousands of reports in order to identify it.
Choose the Right Software
Instead of fixating on the most extensive products, look for software that aligns with your requirements. An “almost” match won’t cut it. The real focus should be on tracking demand streams and drivers so that the technology provides the right kind of support for your operations.
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If you have little experience, opt for a product with a simple interface. Many solutions use basic dashboard interfaces to collate graphs, charts and diagrams. This will reduce your learning curve with the system, leading to faster use across your business.
As with any software, it’s best to invest in a system with a broad range of functions that you’ll actually use, rather than bells and whistles that cost extra but you don’t need. Ideally, you want the option to dig down into the intricacies of analytics without sacrificing efficiency and user-friendliness.
To guarantee a great fit, consider the value of the following based on your individual needs:
Finally, prioritize scalability. Your needs will change, so it’s essential to invest in a system that facilitates continuous improvement and growth.
Benefits of the Right Demand Planning Tool
1. Greater Efficiency
With demand planning and forecasting in place, you’ll be better equipped to keep the appropriate amount of inventory on hand and manage your capacity. And with the ability to create a plan using historical data insights, you can anticipate future demand more accurately. Hello supply chain efficiency!
2. Smooth Collaboration
Supply planning software also aids in communication and collaboration, with solutions facilitating information flow throughout the supply chain network. This leads to greater visibility and real-time updates for teams and stakeholders.
Portals grant access to key information such as supply schedules, inventory stocks, customized orders and more.
3. Data Analysis
Data aggregation: Before you can start making the data work for you, you need to search the available information and bring it all together in a report-based summary.
Trend analysis: These features take past information into account and produce forecasts that also consider fluctuations in data. Think of the lack of demand for winter coats during the summer season, or promotions that likely boosted results for a given period — there are many reasons the data may not accurately reflect ordinary demand.
Predictive analysis: Basically the real-life version of fortune telling (except founded on data), predictive analysis uses techniques from machine learning and statistics to make predictions based on current data.
4. Reliable Forecasts
Your forecasts are only as good as the data you have. Thanks to demand planning solutions, you don’t have to keep shooting in the dark and hoping you’ll hit your target. The ability to aggregate and analyze endless amounts of information means you can expect more accurate forecasts.
Which leads to:
5. Fewer Stock Shortages
When you have a reliable view of future demand, you can control inventory appropriately. Avoid the pitfalls of short-term planning by looking at the big picture.
Demand planning systems ensure inventory managers place the appropriate future orders based on projected demand. You won’t have to worry about extra stock piling up in your warehouse, or more importantly, running short on supplies when a customer’s needs exceed what you have on hand.
6. Reduced Costs
All of this leads to those magical words: cost reduction. Sleep better at night knowing your bottom line isn’t going to suffer a severe blow, either in the form of products gathering dust on the shelves or by dropping big bucks to rush an order because you’re suddenly short 300 units and the customer is beating your door down (figuratively, of course).
The question now is, which solution will give you what you need?
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The Best Demand Planning Software Vendors
To help you get started and find a suitable software solution, our team of analysts put together a list of the top 11 demand planning tools: