Demand planning and forecasting is a critical aspect of supply chain management. It helps businesses identify what products they need to sell and ensure they are available when customers want them. But demand planning isn’t just valid for sales; it can also improve other parts of your supply chain planning, management, and operations like inventory management, logistics, and more.
WHAT IS DEMAND PLANNING & FORECASTING?
Demand planning is the process of forecasting and predicting future demand based on historical data. Forecasting is the process of predicting future demand. Although both activities are closely related, they are not identical: forecasting is a subset of demand planning; in fact, “demand” and “forecast” can be used interchangeably depending on context.
WHY IS DEMAND PLANNING IMPORTANT?
Demand planning is a process that helps you understand your customer’s needs and how they vary over time. It’s also an essential step in supply chain management, as it allows you to anticipate demand by anticipating how your customers will use the products or services you provide. It gives an insight into how to work on supply chain network design and cater to the end-to-end requirement.
HOW DO DEMAND PLANNING AND FORECASTING BENEFIT SUPPLY CHAIN MANAGEMENT?
The most apparent benefit of demand planning and forecasting is that it allows businesses to make better decisions regarding resource allocation during peak periods or seasonal fluctuations; they’ll have access to more accurate information than ever!
∙ Reduced Operational Cost
Demand planning is a process that helps businesses to develop a more accurate picture of future demand. This allows them to forecast, plan and manage inventory levels accordingly to meet customer expectations in the most efficient way possible. In addition, it provides insight into how much stock will be needed at different times during the year, leading to better inventory management and reduced operational costs due to decreased wastage during transit between warehouse locations and delivery vehicles.
∙ Improve Forecasting Accuracy
Forecasting is a crucial element of supply chain management and an essential tool for inventory management. Forecasting is used in virtually every business function, from product development to sales forecasting and marketing. Demand planning aims to predict future demand so you can meet it with your existing supply base. It’s also important to understand what customers are buying today to make informed decisions about how much inventory needs to be held on hand at any given time.
∙ Improved Inventory Management
Inventory management is a critical aspect of supply chain management, and demand planning and forecasting can help with better inventory management. Supply chain management is a very significant part of any business, and it’s essential to have the right tools in place. Demand planning and forecasting help with supply chain consulting and aid with informed decisions about inventory levels and how they can better utilize resources.
∙ Improved Collaboration with Suppliers and Customers
Analysing current demand patterns makes it possible to identify which items are selling well or poorly based on historical data from previous orders. This knowledge will help with better vendor collaboration and helps everyone know what is expected of them. Apart from that, by anticipating what the customers will want, it is possible to address their needs sooner and make sure that supply meets demand in real-time, which means happier customers who know exactly what they want.
∙ Better Supply Chain Visibility
Using AI or predictive analytics software, it is possible to analyse the trends over time when it comes down to sales volume versus order size/value and vice versa. The AIs and predictive analysis software also provides real-time updates about how many units were shipped out today versus last month, keeping tabs on the inventory levels while allowing room for growth if necessary.
Demand planning is not just about forecasting future demand but also about predicting where that demand will come from and how much it will cost you
Demand planning is an effective tool that supply chain managers can use to improve their businesses. It allows them to predict future demand and manage inventory levels more effectively. This results in improved customer service, reduced operational costs, and better supplier coordination. Demand planning also encourages collaboration among companies as they work together towards common goals, improving communication among employees and reducing waste within organizations. However, as much as it is essential to work on an ideal supply chain network design with close to accurate demand forecast and planning, it is equally important to have the right team for the job by side.
With RK Foodland, the team of experts and experienced professionals in the domain ensure demand planning that helps improve the supply chain’s total efficiency. Integrating the best technology and intelligent approach, RK Foodland provides with demand planning and forecasting process that helps with winning an edge over competitors amid the fierce competition. Form accurate forecasts to analyze the upcoming trends in demand patterns; RK Foodland also helps with improving the accuracy to reduce risks, improve operations, and put in force a dynamic and effective supply chain planning for better results.