Demand planning and forecasting is a dynamic process of predicting future market conditions, consumer trends, consumption patterns and demand drivers as an integral part of supply chain management. A close to accurate prediction and analysis of demand planning and forecasting further aids the process of inventory management, production planning, logistics, and distribution, along with eliminating the dominant risk factors. A technique that helps with planning effective integration of supply chain, logistics, and distribution, this process needs thorough incorporation of various elements and fundamentals for effective implementation and results.
To ensure a successful demand planning and forecasting, incorporate below-mentioned four fundamental foundations and channel result-oriented supply chain strategies.
- PRODUCT HISTORY AND ANALYSIS
To accurately predict and execute the most efficient demand forecast, it is essential to understand the product history and analyse the sales pattern, consumer behaviour, and internal and external trends impacting the supply. It makes strategizing the supply chain more accessible and helps eliminate risk factors hampering demand and supply equilibrium. Reading the product history and its previous forecasts helps identify loopholes in inaccurate predictions. It also helps with understanding the demand planning and projection performance, along with managing its strategic implementation and incorporation with the supply chain. Predicting demand using technology that makes creating forecasts based on product history easier helps streamline effective demand planning and forecasting and works like a significant determinant that encourages working of supply chain strategy with total efficiency.
- IDEAL FORECASTING METHOD
Since the primary objective of demand planning and forecasting is to execute an ideal supply chain strategy, it becomes vital to pick the proper demand forecasting method which gives a high forecast accuracy. The approach and methodology can differ, resulting in varied predictions from analytics. However, the difference may not be significant, but in some cases, a different method can change the parameter along with the perception of its execution owing to the market situation. Thus, it is essential to incorporate the best demand assessment method to ensure the most accurate prediction that reduces uncertain risks. It not only helps with mitigating the risk factor but also highlights possible uncertainties possibly hindering the integration of supply chain strategy and hampering effective management. Using the A-B testing method to formulate the ideal approach or a combination of various techniques can help determine the strategy’s variables and dynamics.
- INTERNAL AND EXTERNAL ASPECTS OF TRENDS
While beginning with demand planning and forecasting for supply chain strategy, it is crucial to understand and analyze the different aspects of trends that can impact the efficiency of predicted analytics. These aspects of trends can be classified into two major categories that are further narrowed down into different channels affecting the implementation of demand planning and forecast. These two classifications, Internal and External factors include analysis from previous sales, cultural shifts, and changes in consumer behavior and make an integral part of trend analysis. Analyzing the trends closely, and highlighting a pattern based on consumption patterns and demand drivers, approach, cultural change, major shift or deviation in sales, etc., becomes essential. Once these patterns are stressed, it becomes convenient to understand the prediction of the demand and influence the accuracy by using the right strategies. As one of the most reliable approaches, understanding aspects of trends and reading the internal and external factors determining the accuracy and efficiency helps with very effective integration of the supply chain strategy.
- EFFICIENT USE OF TECHNOLOGY
Technology is one of the most pivotal pillars that encourage smooth working of the supply chain and helps with result-oriented demand planning. With advancements and the newest technological introductions, it is possible to accurately predict the analysis and integrate the right essentials for efficient execution. The emerging trend of data science analytics that backs prediction accuracy aids with better demand planning and forecasting. However, the company must plan a smooth integration parallel to the supply chain to ensure an accurate demand forecast. And for that, it is crucial to have the right technological tools and AIs by the side. With technical tools that make analytics easier and enhance the ability to forecast with more accuracy or close to accuracy, it becomes manageable to plan end-to-end supply chains in a better and more efficient way.
Since demand planning is a process of anticipating future demand and planning close to accurate prediction, it helps yield optimum results and an effective supply chain strategy. It involves estimating forthcoming sales volume, calculating the required inventory levels, and preparing a plan for handling shortages or excess inventory. And to ensure a program that gives you an idea about the future demand for the products to adjust the supply chain accordingly, it becomes crucial to partner with the best supply chain management company. RK Foodland, one of India’s leading supply chain management companies, ensures an end-to-end fulfilment of the logistics chain and its management. Striving to serve with a fully functional and well-integrated supply chain management, RK Foodland offers solutions aided with practical strategies, demand planning, forecasting, product planning, inventory management, logistics, etc. Using advanced analytical techniques and expert professionals with experience in the domain along with market trends that keep the logistics process updated, RK Foodland is the ideal partner, to begin with, demand planning and forecasting for a systematic and streamlined supply chain strategy.