In today’s inventory-based business landscape, organizations face unprecedented challenges and operate in a fast-paced and ever-evolving ecosystem. Global markets can quickly shift, consumer behaviors rapidly change, and technological advancements contribute to an advanced pace of business and customer expectations. To best meet customer demand and to be prepared for flexible inventory needs, organizations can turn to demand planning and forecasting tools.
Accurate, speedy demand planning and forecasting are paramount for organizations that want to best meet consumer demand while remaining as cost-effective as possible. That’s because businesses that can accurately predict and respond to market demands are better positioned to optimize their supply chains, minimize costs, and enhance overall operational efficiency.
Demand planning and forecasting are not only reactive measures but are also proactive strategies that allow organizations to align their resources with market trends, ensuring they meet customer demands while avoiding excess inventory or stockouts. Instead of manually creating forecasts and predictions, organizations can turn to the leading demand planning and forecasting tools that are available today. These tools can revolutionize the way leaders approach demand planning and forecasting, leading to more informed decision-making and sustainable business growth.
Here’s everything you need to know about demand planning and forecasting tools, including why they matter, and what criteria to look for in selecting this technology for your organization.
To understand why demand planning and forecasting tools matter, it’s important to touch on why these processes are important. You can think of these processes as two sides of the same coin. Demand forecasting is the process of predicting future stock needs, based on past consumer behavior, market trends, and other factors (such as sales and special events). Demand planning takes forecasting a step further: it’s the process of actualizing the information revealed in the forecast and ensuring that inventory levels will be adequate to meet consumer demand.
Why does accurate demand planning and forecasting matter? These processes lead to real, tangible business outcomes, and directly impact the level of service an organization provides for its clients. For example, if there are stockouts and long lead times, customers might need to wait longer to receive their inventory, leading to a less satisfactory customer experience. Studies show that only 20% of consumers will wait up to four days for a delivery.
Keeping appropriate levels of inventory is also essential for profitability. Research shows that oversupply and damage lead to $163 billion in wasted inventory in the US every year. When demand planning and forecasting are used to predict stock needs, organizations can reduce the amount of excess inventory they keep.
To best create forecasts and use them for demand planning, leaders can turn to digital tools and software solutions. These demand planning solutions are in high demand themselves, and there is tons of growth happening in this space, to meet the needs of inventory-based businesses. Research shows that in 2021, the demand planning solutions market was valued at $3.1 billion and that it’s expected to grow at a compound annual growth rate of 10.3% until the year 2030.
Every demand planning and forecasting tool is different, and while there are many options to choose from, they each have specific strengths. Before we dive into the leading options available today, here are some criteria for selecting these tools to keep in mind:
When it comes to demand planning, forecasting precision is essential. Understand how a tool can help your organization arrive at accurate forecasts. Additionally, seek tools that use advanced forecasting algorithms that can handle things such as seasonality, short life cycle products, events, promotions, new product introductions, and forecasting at all levels of your product hierarchies.
Real-time inventory visibility is essential not only for accurate forecasts but also for making rapid-fire decisions in this fast-moving ecosystem. Search for tools that provide you with full visibility into your operations, and which support real-time collaboration across teams and stakeholders.
While all demand planning and forecasting tools will have different bells and whistles, not all of them will display the answers you’re looking for. For example, StockIQ is designed to help you find and solve problems quickly and provides you instant insights into things such as what you’re going to sell, what you need to buy, and what hasn’t sold.
A user-friendly interface is necessary for fostering the widespread adoption of demand planning and forecasting tools across different users. Seek tools that provide you with clear insights and takeaways, and which provide you with key details in a pinch (ideally using graphs, charts, and other visual representations).
If you currently use an ERP, CRM, or other existing system, it’s important your demand planning and forecasting tool can seamlessly integrate with it. The top tools available today have pre-built integration for the leading ERPs, and typically offer full-service implementation, to facilitate a seamless ERP integration.
Whenever you adopt a new system, it’s essential to take certain steps to make sure it’s implemented successfully. Here are some tips for effectively implementing a new demand planning and forecasting tool in your organization.
When you do select a new demand planning and forecasting tool, be sure to participate in any training and education opportunities offered by your solution. All top software options today come with robust features and live assistance to help all users understand how to make the most of their choices. Hands-on training and early education will help promote successful adoption, and ongoing training can help users stay up to date on new features and industry best practices.
Additionally, to encourage successful adoption, involve all key stakeholders from different departments and business units early in the process. Seek to foster collaboration between supply chain, sales, finance, and IT teams, to ensure a uniform understanding of the new systems and protocols. Also, encourage communication to address concerns, share findings, and gather feedback.
A comprehensive change management plan can help facilitate successful change while addressing any resistance to new tools. Be sure to communicate the benefits of your new demand planning and forecasting tools to stakeholders, and clarify how they align with your organization’s strategic goals. Also, provide ongoing support and resources to help employees successfully adopt the tools.
Establish a system for continuously monitoring how your demand planning and forecasting tool is being used, what performance is like, and how successful it is at helping your organization accomplish its goals. You can regularly review usage and outcomes to identify strengths and benefits. You can also look for ways to get more out of your tool. For example, you might discover that you’re neglecting to use a feature that could benefit your organization.
Demand planning and forecasting tools can enhance the way an inventory-based business approaches forecasting. By understanding how these tools work and selecting a tool that’s an excellent fit for your organization, inventory-based businesses can accurately predict their stock needs, improve their operations, and best serve their customers.
Demand planning and forecasting are essential for any inventory-based business. We know that because it’s what we do best. StockIQ’s proprietary forecasting algorithm is proven to generate accurate, sensible forecasts that take real-world events into account. Plus, StockIQ’s analytics and inventory planning features provide you with concise, critical insights, so you can make quick decisions that improve your operations.
Ready to find out how StockIQ can help with your demand planning and forecasting? Contact us today.