Tips to Uses Demand Planning Software to Make Your Demand Planning Smarter
It’s been three years since the world came to a halt because of an unpredicted microorganism. With all the efforts, the world has moved on, and so has the supply chain. However, one key question that every supply chain professional is seeking an answer to is, are we ready if something unprecedented happens again? Yes, the question is superficial, but do you have the answer?
If you are also on the other side of the question and do not know more about demand planning software, continue reading to reach a conclusive answer.
The past year has highlighted more challenges than anything ever did. From paradigm shifts in customer demand, product lifecycles getting compressed, an increasing number of SKUs, a rise of new distribution channels, and much more. These challenges have made us all question the historical data-based techniques of forecasting. Today, businesses have nothing to base their sight upon; they constantly search for new data and insights.
The reasons for all these challenges are clear: we relied too much on the forecasts and did not make the essential decision. Now, businesses are stuck with predicting genuine demand and addressing the gaps between forecasted demand and actual demand.
So, what’s the solution? Well, a smarter way of predicting demand will do it. Yes, it’s time to leave behind the old forecasting methods and move towards a better approach. Here are some insights that will help you transform.
1.Using the two currently most talked about technology leaders, ML and AI, to forecast
Demand forecasting is a critical skill every business needs to learn to sustain itself in today’s highly dynamic market. Forecasting is not just to assist companies in figuring out how much they need to produce to adhere to customer demand, respond effectively to the moving market, and shape the business. To understand it more easily, ask yourself, does your forecast need to be accurate, or nothing more than that? Yes, you got it right; your demand forecasts need to be generated timely so you can act on them. It needs to be agile, quick, easy to comprehend, and so on.
An early obtained forecast will allow organizations to act on the prediction effectively. Artificial Intelligence (AI) and Machine Learning (ML) are now one of the best techniques out in the market to predict quickly, early, and effectively. Avercast’s demand forecasting software uses intelligence to predict demand with up to 99% precision for 60 months in the future.
2. Determining the right performance measure
How many companies do you know that had accurate forecasting during a pandemic? Well, actually, our clients had, but that’s not the point. The vital thing here is that accuracy should not be the only performance measure. You can find innumerable instances, especially for medium to long forecasting, where demand planners found themselves stuck in too much data to model effectively.
Companies need to understand that forecasts are input for decision-making, and it takes everyone’s collaborative effort to reach the outcome or the final decision. Instead of focusing on accurate prediction, start focusing on different touch points like on-time full delivery, inventory stock, current resources, etc. Avercast Demand Planning software allows you to track your inventory in real-time or execute effective capacity planning and encourages inter-departmental collaboration that solves all your issues in one suite.
3. Enabling proper segmentation for improving planning performance
Another way to improve demand planning and forecasting is to segment your products. You can divide various attributes into different classes, like the same product features can be in one segment, one can be classified based on customer behavior, and so on. Segmentation is essential because every product needs different logistical approaches. For instance, a manufacturer must ship perishable products differently than durable goods.
With the extreme proliferation the market is facing right now, it becomes difficult for humans to segment without any error. To ensure there are no mistakes, you can use Machine Learning. It quickly finds links and associations among large volumes of data and divides them into separate segments.
4. Shaping demand by asking “What-if”
Making forecasting more efficient buys you more time to act on the forecast. You start focusing more on what you can do as a business to enhance the efficiency of the entire process rather than contemplating how to fill the gap between actual and predicted demand. The advanced demand planning tool helps you attain the optimum result for your business. Avercast’s Demand management software allows you to simulate various scenarios by executing “What-ifs.” It assists you with experimenting with any possible changes or scenarios that may come up in the future. It enables you to play with the simulation to devise a plan to be ready for dynamics that can arise.
Forecasting is critical, and doing it collaboratively with other stakeholders will enhance your decision-making and benefit your entire process. Using AI and ML is not something you should ponder upon first and then act on. Your competitors currently use these to run you down. Avercast is always determined to assist you with all demand planning-related solutions with its advanced algorithms-packed Demand Planning software. Besides taking you a cut above your peers, the software will help you enhance your business’s overall productivity and bottom line.