How to Choose the Best Demand Planning Software
Hundreds of social media posts, dozens of print advertisements, and series of TV commercials leading up to the extravagant sales offer or new product launch. However, all these will not deliver their end goals if the companies stock out. So, what is necessary? Maintaining inventory and waiting for customers to come on their own or spending large sums on advertising but not on demand planning.
The answer is both. Yes, you want both! You need customers to keep increasing revenues; however, you also need demand planning to plan effectively and efficiently to fulfill consumer demand. Therefore, choosing world-class demand planning software has the utmost importance.
Read on to learn these essential steps that will help you decide the best demand planning software. But before that, let us dive deep into what demand planning software is and how it helps demand planning.
What is Demand Planning?
Demand planning is a core supply chain activity and followed by every business whether it is in retail or in services or in B2B. It is an art of questioning yourself “what is going to happen in future” and then based on serval analysis reaching the conclusion that this is going to happen, confusing? Understand it in simpler terms, Demand planning is a process of forecasting the demand for your product(s) or product line and then making plans to fulfill the estimated demand.
For a person with no supply chain background demand planning is the anticipation of sales that companies make in order to increase their revenue or penetrate market for upcoming month, year, or number of years.
What Does Demand Planning Software do?
An Olympic medalist cannot dive right into the Olympic pool and win the medal. She goes through years of training equipped with world class equipment. Similarly, your business will only succeed if you get equipped with world class demand planning software. There is no doubt that you have spent thousands of hours in order to build and grow your business, now you need services that can set you apart from others. Equipments that makes you future ready, and demand planning software is very well suited for that.
Demand planning software allows you to accurately forecast your demand, plan efficiently to fulfill the estimated demand and monitor the whole supply chain process. The demand planning software uses historical data, combines it with current trends and seasonality factors and then based on that forecast data. It provides intelligent data visualization which helps demand planners extract meaningful data.
5 Essential Tips on How to Choose the Best Demand Planning Software
- Deliberate, decide your needs, and fix the budget: The foremost thing while deciding on demand planning software is to determine your needs. The software is well known for solving various business problems. Thus, no two software are alike. Therefore, it is necessary for you to decide on what your specific needs are. Also, you do not want to go for a demand planning software and then have nothing to spend. Fixing the budget is crucial as it affects your day-to-day operations directly.
- Enlist all the features and specifications: Once you are done deciding your needs, start preparing a list of specifications and features that will help you fulfill the needs. Combining all the specifications in one place will assist you in selecting the potential software. Some of the crucial things to list are process workflow, essential features, tools at present and so on.
- Initiate research and review the reviews: Moving on to third tip, start your market research for the software. You can refer to various lists provided by different websites. These websites make a list of all the software based on their features, benefits, customer reviews and rankings. Do not forget to read and review the reviews for the potential software.
- Put them against each other: Do not invite them to fight for you, instead compare their features. Visit every potential’s website, read their testimonials, search about their performances, inspect their social presence, what their customers think of them, what features set them apart. Finding answers to these questions is important and once you get it, the decisive blow is just one stroke aways.
- Use it before buying it: In other words, make sure to take a product demo. Testing the useability is important and scheduling the product demo is one of the easiest ways to do that. During these talks, the salesperson takes you through the product tour, makes you aware of the features, and how they can assist your business to grow.
Steps involved in Inventory Demand Planning Process
Following are the six steps involved in an effective and efficient demand planning process:
- Selecting Demand Planning Software: Starting the process is always important and initiating it with a bang just increases the effectiveness. Therefore, always start your demand planning process with demand planning software, form a cross-functional team and elaborate their roles and responsibilities clearly
- Collection of Data: The second step in the planning process is collection of data. There are two different pieces of data that need to be collected, one is internal data and another external data. Collection of internal data is easy as you already have it. Some of the internal data are past sales data, historical purchase orders, current inventory stock etc. Some of the external data are seasonality factors, current trends, customer buying behavior
- Analyzing the collected data: After data collection the third step is data analysis. You need to make the most of the data collected. The data can help you extract valuable information like inventory turnover ratio, total sales per channel and so on
- Determining the suitable demand forecasting method: It is a crucial step as a lot going forward will depend on demand forecasting, hence it becomes critical to choose the right forecasting method. There are various methods of forecasting which are broadly classified as quantitative and qualitative methods. Some of the well-known qualitative methods are the Delphi method, sales team surveys, etc. Some of the Quantitative methods are regression analysis, econometric forecasting and more.
- Demand Forecasting: Once the suitable method is finalized, start demand forecasting. Use an efficient demand forecasting software. Make sure to cross check the forecast by showing them all the stakeholders. Take their input to supervise whether you are on the right track or not. Once you get the forecast start planning your inventory.
- Assessing the results: Any process is incomplete without measuring its results. Thus, the sixth step of the planning process is assessing the results that you get after implementing the demand planning. Measure how your process has performed, is it what you were expecting it to be or not.
Best practices for demand planning
Performing demand planning needs the right demand planning software, demand planning tools, precise data, models and more. Here are some of the best practices of Demand planning:
- Selection of the right demand management software: The effectiveness of the process depends on the right equipments, which tracks your products’ performance. You can always go for leading demand forecast and planning software by Avercast.
- Measure your forecast: It is always advisable to keep measuring your forecasts at location, customer, and product level. This helps in continuous improvement and enhances accountability.
