4 Questions You Need to Understand If You Want to Successfully Meet Consumer Demand
WHAT IS DEMAND FORECASTING?
Forecast, predict, foresee, project, anticipate.
Has anyone ever told you to “just make your best guess?” Well, forecasting is so much more than just a guess. Demand forecasting takes many factors into account to produce reliable predictions of future trends. Some of these factors are past sales data, technology, current market trends, consumer profiles, preferences, competitive strategies, and more. Using these factors, forecasts are created to show data of future consumer demand.
For example, stores often use retail demand forecasting methods to ensure they are prepared to meet consumer demand. It can be hard to not only be aware of what will become popular, but also when boosts in popularity will occur. Demand management software is a powerful aid to these uncertain conditions.
Forecasts have the potential to strengthen the companies that utilize them. There are so many benefits that come from implementing demand forecasting software. These benefits can be financial, operational, and can boost both the confidence of you and your consumers.
A real-world example can be seen in basically any department store you go to. Seasonal items are put up throughout these stores. It seems at times they are looking for any reason to market new products, and they probably are. Not only are these displays festive, but they typically showcase a new slew of products. Typically, there are items that were displayed the previous year alongside some new products.
How do these stores see success? They’re aware of the demand of their consumers. Most shoppers expect to be able to buy seasonal items on a whim. Stores that have taken the above factors into account are prepared to please their customers.
WHAT IS THE RELATIONSHIP BETWEEN DEMAND FORECASTING AND PLANNING?
Have you been on Pinterest before? Well, let me tell you about the expectations that some Pinterest bloggers set. They post strategically planned and positioned images of perfectly cooked foods. As a confident onlooker, I have been known to produce what the internet refers to as “Pinterest Fails.” A cute Easter bunny cake can quickly turn into a horrific pile of mushy frosting with creepy ears sticking out of the side and eyeballs sliding off.
What does this have to do with demand planning and forecasting? Well, demand forecasting is comparable to the picture-perfect bunny cake. It outlines what your outcome will be. However, if you’re like me and don’t always plan effectively, you won’t be able to achieve your desired outcome very easily. That’s where demand planning comes into the picture.
It’s really all in the name. Demand planning is when you make plans to be able to effectively handle the demand that has been forecast. Forecasts are super insightful, but they don’t accomplish much if you don’t use them to make plans for your future operations.
What you need to remember is this: forecasts show what the future will look like, and planning shows what your operations should look like.
HOW DO I KNOW WHAT TO FORECAST?
It’s wise to consider what to forecast, and how far into the future to do so. The length of a forecast and its accuracy are related. The further into the future, the less reliable a forecast becomes. However, you can still achieve reliable forecasts when you use Avercast’s demand planning and forecasting software. It’s always important to revisit and update forecasts.
Often, changes among some of your products’ sales are so rapid and constant that you can justify frequent forecasting. Other times, some products’ trends are fairly consistent and don’t require as frequent of forecasts.
When you introduce a new product or service to your consumers, it can be a nerve-wracking experience for you. What if it isn’t successful? What if it’s so successful that you run out of inventory before you can produce more? Using forecasting demand methods, you can create something to rely on, rather than just making guesses until you have built up a sales history for that item.
HOW CAN MY COMPANY GET OUR HANDS ON DEMAND FORECASTING SOFTWARE?
Oh, do we have good news for you! Here at Avercast, we have been in the supply chain planning world for over 40 years! Over those years, we have developed the best demand forecasting and planning software available.
Many of our customers have seen the vast benefits that come from implementing our software. If you’re interested in reading some of these testimonials, they can be viewed here.
We know your company can be improved in many ways if you decide to use our software. We would love to explore specific areas of your business that can be strengthened. Contact our experts today to schedule a free demo!
