What is Demand Planning and Forecasting?
Demand planning and forecasting is the process of predicting customer demand for products or services to ensure delivery, completion, and ultimately customer satisfaction.
The Restaurant Analogy
Think of it like running a restaurant. We’ll call our restaurant Dinner41. By implementing demand planning and forecasting, Dinner41 can better prepare for imminent and future reservations and walk-in customers who visit the restaurant. Foresights of consumer demand can help Dinner41 design a demand plan. This plan may include how to adjust based on cancellations or rushes and lulls, how to better streamline their kitchen-to-table process, and where to allocate finances (food inventory, new cookware, extended hours, servers’ tips, etc.)
The objective is to carry sufficient inventory levels to meet demand without having a surplus. If Data41 stocked up on too many ingredients and didn’t have enough customers to consume their food, they would lose profit on food expenses. An excess of inventory can result in locked up working capital, which could have been spent elsewhere. Alternatively, poor planning for demand can lead to a shortage of supplies, backorders, or an expensive scramble for materials, consequently causing delays and unhappy customers. A vast array of factors can influence demand such as economic shifts, labor force changes, natural disasters, inclement weather…global pandemics, etc., etc. But with the help of Data41 and sophisticated software like IBM Planning Analytics or Jedox, demand planning and forecasting could be implemented to potentially avoid these issues, or at least lessen the negative impact of unforeseen situations. We can help you optimize cashflow and run your business more efficiently.
Why Are Data Analytics & Demand Planning and Forecasting Important?
Data analytics is essential to demand planning and forecasting. Real-time insights into inventory movements paired with customer behaviors and illuminated patterns create the perfect arena to identify areas of improvement that will enhance your business. This analytical process is said to be most successful when it is closely linked to sales and marketing: the departments that are most commingled with customer retention, acquisition, and pipeline. Our team can provide a seamless integration of planning, reporting, analysis, and stakeholder engagement to streamline this process.
Contact us today, and let’s get you a consultation!