If you aren’t sure how much product your store or warehouse needs, it’s time to incorporate demand planning into your business. Demand planning is the first step in supply chain management. It’s a process in which a team determines how much product needs to be ordered for a business’s future.
Demand planning is crucial to your business’s organization and growth. If you don’t have some form of demand planning in place, you should start thinking about making it a reality for your business.
What Is Demand Planning?
Demand planning is the process of creating an executable plan for product creation and sales. Your demand planning team can consist of a range of people, from sales managers to finance personnel and marketing managers. The demand planner usually runs the team and makes the final calls for production and manufacturing.
The ultimate goal is to create product portfolios and statistical forecasts for product demand as well as develop trade promotion when needed.
How to Do Demand Planning
You must appoint someone who can manage all the elements that go into a proper demand planning process. Those elements are:
- Product portfolios
- Product forecasting
- Promotional plans
Once you appoint someone, they bring different managers and employees together to discuss and plan for future demand. This group will develop a demand plan that meets customer demand, provides a positive customer experience and maintains or increases profits.
Demand Planning With Inventory Management
Without proper demand planning in supply chain management, you won’t know the exact degree of your customers’ needs. This lack of knowledge could leave you with an insufficient or overstocked inventory, which loses you money. With the proper software, your team can monitor and alter production plans based on your company’s sales forecast, marketing measures and purchase history.
New Products and Inventory Control
Many businesses order in bulk when releasing a new product. Demand planning provides you with statistical forecasting that determines the appropriate amount of product to request based on customer behavior, the time of year and your financial capabilities. After releasing a new product, ensure that your team frequently meets to review the demand-supply ratio as time goes on.
Erratic Demand and Safety Stock Inventory
Erratic demand can leave your business without enough product to meet purchases. Thankfully, a supply chain demand planning team can prepare and handle these situations. Demand planners typically use the average demand to order more products without potentially spending more than needed. This strategy satisfies customer needs without harming business profits.
Why Demand Planning?
Demand planning is crucial to maintaining customer satisfaction and increasing profits. When your team pinpoints the products your customers are buying, they can order more of those specific items for future purchases. In doing this, you can maintain customer satisfaction and demonstrate care.
If you do not keep your inventory stocked and sell out of a product that customers need, they may doubt their purchase and look for a product elsewhere. Therefore, maintaining product stock helps you make more sales.
Finale Inventory Offers Businesses Reliable Inventory Management Software
Demand planning software is critical for your business’s success. Inventory management software is one tool your team can employ to plan out manufacturing, warehousing and transportation. Finale Inventory offers a top-of-the-line inventory management software that’s fast and adaptable to your business’s growth.
Start a free trial today or schedule a live demo to learn more about what Finale Inventory can offer your business.