What is Demand Planning?
Demand planning is so crucial in business. Getting it wrong can mean the difference between success and failure. If you don’t know what your customers want, how are you supposed to give it to them? Demand planning serves not one but two essential functions:
First, demand planning ensures that companies have the right number of products in the right places so businesses are ready to meet customer demand. You don’t want to be caught shorthanded. That translates to lost sales and angry customers.
Secondly, demand planning allows companies to increase efficiency and strategically manage inventory. Like chess, you have got to think several moves ahead to win. If you don’t have a good demand planning strategy, you could end up with a warehouse full of unsold inventory, leading to storage fees, clearance sales, or stockouts.
Demand planners: The unsung heroes of the supply chain
Demand planners are considered superheroes in business because they possess unique skills and abilities that enable them to perform a vital function – forecasting the future! Demand planners predict customer demand for a company’s products or services, a role that is critical to the company’s success. Demand planners have to:
- Analyze volumes of data
- Understand volatile market trends
- Consider various external factors
Any one or all three of these aspects can dramatically impact demand, including changing economic conditions and consumer behavior—a heroic task, especially when most of them are equipped only with spreadsheet software.
Demand planners don’t work in a silo. They work closely with other departments, such as sales and marketing, to ensure that inventory levels are optimized, products are available when customers need them, and promotions succeed. These heroes can help companies thrive even in challenging economic times with their ability to anticipate market trends and plan accordingly. It’s not easy, particularly in recent years. Demand planners must stay on top of their game, from fluctuating market trends to changing consumer behavior. They face many challenges that can make their job tougher than wrestling the Hulk. But to maximize the “superhuman abilities” of demand planners, you’ll need to give them the necessary gadgets for their utility belts. This means picking the right supply chain software to perform the analytics they need to boost accuracy.
The importance of getting it right
Choosing the right demand planning software is as important as picking the perfect ride. Just like not everyone needs the same car, you must choose the software that’s right for your specific needs. So, if you’re in business, investing in a talented demand planner, upskilling the team, and giving them the tools they need to perform is worth the investment. Equipping them with the right tools is crucial; they are the key to success! After all, what would Wonder Woman be without her lasso and armbands to help her?
Five Critical Challenges
In a world where businesses must battle ever-changing market trends and consumer behavior, a dynamic team rises above the rest: demand planners and their trusty supply chain planning software. This powerful duo helps businesses accurately predict future demand and stay ahead of the competition. But beware, for the path to accurate demand planning is fraught with challenges. Here are the top challenges of demand planning and how to overcome them:
- Lack of Data: One of the most significant challenges for demand planners is the lack of data. Making informed decisions about future demand is impossible without accurate and timely data. To overcome this challenge, demand planners should invest in advanced analytics and machine learning tools like GAINS to identify historical and exogenous data patterns.
- Forecast Accuracy: Demand planners can struggle to make accurate forecasts even with access to vast amounts of data. This is because demand patterns can be unpredictable and subject to sudden changes. Demand planners should continuously avoid a set-it-and-forget-it mentality and proactively plan for demand.
- Supply Chain Disruptions: Disruptions such as natural disasters or transportation delays can significantly impact demand planning. To mitigate the impact of these disruptions, demand planners should create contingency plans that can be quickly implemented.
- Managing Product Lifecycles: Demand planners face another challenge: managing the product lifecycle. Demand for products can change over time, and it’s essential to anticipate these changes to avoid overstocking or understocking. To manage product lifecycle effectively, demand planners should use advanced analytics tools available to GAINS users to identify patterns in sales data and make informed decisions about when to increase or decrease order volumes on existing products.
- Integration with Sales and Operations Planning: Demand planning is just one part of the broader sales and operations planning process. To ensure effective demand planning, it’s essential to integrate demand planning with other areas of the organization, such as sales and operations. This will enable demand planners to make informed decisions aligning with the organization’s goals and take into account the market nuances, sales promotions, and more.
Demand planners must stay sharp to succeed in fluctuating market trends and unpredictable customer behavior. Unlike spreadsheets, GAINS provides the solutions to overcome these obstacles and emerge victorious. Demand planning requires a practical collaborative approach using advanced analytics tools with capabilities beyond Excel spreadsheets. With the power of accurate demand planning, businesses can manage inventory more efficiently, reduce costs, and satisfy customers like never before. Embrace the power of demand planning and forecasting to take your business to new heights!
CLICK HERE To learn more about how you can become a demand planning superhero with the power of GAINS!