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What are the Steps Involved in an Inventory Demand Planning Process?

Imagine you are a demand planner, and the only target you can hit is the point where you only have to produce as much as required to meet the demand. Nothing more than that or nothing less. That's it! That's what the tussle demand planning is all about. Demand planners' daily and day-out strive are about reaching close to the optimal point where losses are minimal, and sales are at their peak.

However, it is not as easy as it seems. There are loads of work required to achieve this feat. It starts from accurate forecasting to planning efficiently and, from there on, delivering the order within time to ensure complete customer satisfaction. Because a satisfied customer not only sticks with the business but generally brings two or more together.

Having loyal customers is a dream for many businesses or enterprises, and one key thing that can help you is demand planning. By the end of this blog, you will get familiar with demand planning, demand planning software, its benefits and the steps involved in the demand planning process.

Demand Planning: Supply Chain's Hidden Cornerstone

As echoed by many industry leaders, demand planning is one of the keystones in successful customer satisfaction and retention.

"Demand planning is a process where demand planners anticipate the future of a company's products demand. Simultaneously, they use these predictions to manage their inventory, their delivery team in short, the whole supply chain team, in order to meet the forecasted demand."

The accuracy of your demand planning always depends upon your demand planning software. It is always essential because the team using excel spreadsheets instead of software has not been precise enough and has been more error prone. Hence, avoid entering data manually into excel sheets and start using demand planning software. More on it later. First, let us see how a demand planning process is set up.

Steps Involved in Setting-up Demand Planning Process

Implement Demand Planning Software: First and foremost, an important step is to implement the demand planning software, which will assist you in tracking your inventory life. The software allows you to trace the performance of your inventory. Besides, the software also helps you keep track of current shipments, sales, the monetary value of stock and much more. You can team up with Avercast, a leading demand planning software provider, and start assessing your inventory at the earliest.

Data Collection: After the implementation of the software, start collecting data. The data is segregated into two forms, one internal and another external. Internal data are the data already available to you, like historical sales data, product performance and so on. At the same time, external data is data that comes to you from external sources and cannot be controlled—seasonal trends, customer buying behaviour, current trends and so on.

Data Analysis: Once you have collected all the data, start analyzing it. Remember, the data you collected is just the storage eater monster sitting in your computer without analysis. Hence analyzing information is crucial because only after that will you be able to figure out some critical metrics like inventory turnover ratio, total backorders, overall sales from each channel and much more.

Selection of Demand Forecasting Method: After complete data analysis, move on to demand forecast. The demand planning tools enclosed in the demand planning software help you forecast demand. Then the software works as demand forecasting software. Various methods can be used to conduct the forecasting. These methods are broadly classified into two: Qualitative methods and quantitative methods. Qualitative methods include historical analysis, the Delphi method, Sales team surveys, and so on. Contrastingly, quantitative methods include regression analysis, econometric forecasting and more.

Demand Forecasting: After figuring out the suitable forecasting method, go ahead with demand forecasting. Once you get the demand forecast, start planning your inventory accordingly. Make sure you cross-verify the forecasted demand with your key stakeholders, ensuring that you are on the right track.

Assessing the Planning Process: Once you finalize the plan to meet the forecasted demand, do not forget to evaluate your planning process. The analysis will help you identify where you hit the chord, what could have been done better and what needs to be avoided in future planning processes.

Demand planning is critical; therefore, it becomes necessary to entrust leading demand planning software like Avercast. With more than 40 years of experience, it is helping companies rectify and solve some of the complex demand planning problems. So, do not delay any more and get in touch with an expert today.

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This report covers business forecasting software offerings comprehensive demand forecasting software suite that includes several modules for proper business planning, including sales forecasting software, business forecasting software, forecasting software, and more.

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Why You Should Automate Your Inventory Forecasting

Keeping track of your Amazon inventory might sound like a chore, and a very difficult chore at that. It usually entails poring over spreadsheets upon spreadsheets on your laptop and making harried calls to your suppliers. It could be stressful and time-consuming, but ultimately, it’s essential to your business.

 Inventory management keeps your warehouse organized, allows you to manage your time efficiently, and helps you plan better. With that said, good inventory management also helps you take in more revenue and get more loyal customers.

 Inventory management is a full-time effort for every business owners out there. It’s part of the process of managing your ecommerce business. It eats up a lot of time and energy, so it’s quite prone to problems too.

 There are a lot of problems that Amazon sellers could face when managing their inventory. There could be missing orders, backlog orders, or unpaid orders.

 Don’t even let us get started on stockouts. Stockouts are one of the major problems of Amazon sellers everywhere. Inventory stockouts affect your Amazon ad campaign and gets you behind on competition.

 If you’re a constantly stressed Amazon seller, this article is for you. Find out how to solve your inventory problems with an automated solution you deserve.

Why are stockouts bad for your business?

Stockouts cost businesses a lot. They aren’t that obvious, but they happen. Aside from losing a lot of productivity, potential sales, and customers, there are several other reasons why stockouts are bad for your business. Here are some of the ways how stockouts hurt your Amazon sales:

 ●     Your customers become unhappy

Unhappy customers are even worse than lost potential customers. Why? Most of the people in this category could have been loyal customers to your business, and grew dissatisfied with your stockout/s. When they move their business somewhere else, you not only lose potential sales, but also repeat sales.

 ●     You incur greater warehouse and freight costs

When you have stockouts, the warehouse fees don’t wait for you. You’ll keep paying them even though you’re still waiting for your supplies to arrive. Speaking of arriving deliveries, you’re also paying for increased freight costs for expedited deliveries, ordered during a time of panic caused by stockouts.  

 ●     You overstock as a consequence

During the panic period that stockouts cause, most sellers start to stock up in excessive amounts in order to anticipate the increase in demand. And then, after the smoke clears up, they’re left with too much stocks stuck in their warehouses with no one to sell to. Overstocking leaves you with a variety of issues like increased warehouse costs, shifting demand, and warehouse clutter.

 These are the not so obvious costs of stockouts and overstocking. You may not notice it, but these problems actually hurt your business big time.

You might be scratching your head wondering how to solve this problem. But there is one solution most entrepreneurs use.

Here’s where inventory forecasting comes in.

What is inventory forecasting?

 Inventory forecasting is a strategy based on the Goldilocks Principle. The Goldilocks Principle  refers to making sure you’re neither overstocked nor understocked.

 When you’re neither overstocked or stocked out, this is called being in the “Goldilock zone”. The Goldilock principles is all about striking the perfect balance in inventory management and winning at the same time.

 This is an ideal situation for all Amazon sellers, considering that it gives you your much-deserved peace of mind and organization. Inventory forecasting is the number one tool to  you get to the Goldilocks zone, or so these experts say.

 Here’s how inventory forecasting works. Inventory forecasting involves choosing the best forecasting technique. After you’ve selected the most apt forecasting technique for you, it’s an array of calculations and spreadsheets from then on.

 Oh, and did we mention it also involves formulas you need to use?

 While inventory forecasting is a necessity for your Amazon business, that might not be the case for many very busy Amazon sellers. With things to consider like marketing, customer service, and product research or production to deal with, inventory management and forecasting takes up a lot of time and energy.

 Plus, it’s also quite boring.

 This is where automated inventory forecasting comes in.

 Automated inventory forecasting uses software that automatically calculates demand for your products and the amount of goods you have to stock. It’s a software that easily integrates to your Amazon shop and then takes all important data.

 This comes handy for Amazon sellers especially when your product is in demand season. It helps you prepare for sky-high demands during holidays and other peak seasons. Aside from that, it helps you avoid overstocking because it gives you the exact time when and how much you need to stock up.

 What’s the deal with automated inventory forecasting? Is it something that you should invest in?

Why automate?

There are several reasons why you should take advantage of automated inventory forecasting. Number one, aside from keeping you in the Goldilocks zone without much legwork on your part, investing in automated inventory forecasting brings about a huge number of benefits for your Amazon business.

We’ve compiled some reasons for you to consider investing in an automated inventory forecasting software. From reducing costs and building better relationships with your supplier, automated inventory forecasting presents a lot of viable solutions to help you win in your Amazon business.

Remove the guesswork

Automated inventory forecasting allows you to take a closer look at the status of your business with sharp precision. It removes the guesswork out of inventory replenishment, which helps you make smarter decisions in managing your inventory.

Plus, most automated inventory forecastingsoftwares also calculate how much demand you should expect at a given time. This way, you encounter less seasonal crunches and gain more efficiency during peak and low seasons.

Also, you’re given more accurate data, which helps you make more accurate decisions. See a pending stockout? Replenish your inventory at the right time. Peak season is coming up? Order new supplies beforehand. There’s no more guessing and second-guessing yourself when it comes to inventory management with automated inventory forecasting.

Another thing is automated inventory management digs up the anomalies in your inventory. Automated inventory management and forecasting lets you know about where your orders stream in and out. There’s no more guesswork on how many unpaid orders you have and unfulfilled orders. It’s all right there on your dashboard now.

Keep revenue flowing

Stockouts have a habit of halting sales when they happen. Your revenue goes into a screeching halt, you have to wait for the new supplies to get to you, and worse, your customers go away and buy your products somewhere else.

That sucks, right? When you’re in inventory zen, your revenue doesn’t have to stop coming in. Aside from having moments of less sales, and worse, no sales at all, you’ll have the advantage of continuity in your sales, which translates to continuity in revenue.

With effective inventory replenishment, you also build a stronger and reliable relationship with your repeat customers. Repeat customers offer higher lifetime valuecompared to one-time customers. Aside from that, keeping great relationships with your repeat customers eventually turn them into your brand advocates, giving you more sales in the long-term.

More time in your hands

As discussed a while ago, inventory management and forecasting takes up a lot of time in managing a business. With automated inventory forecasting, you have less time poring over spreadsheets and more time to focus on the other aspects of your business.

Another reason why automated inventory forecasting gives you more time also lies in its quick execution and results. It’s easier to move on from one business process to another when you have accurate and fast data. You get lightning-fast results and eventually make quicker business decisions.

 Scale your business faster

Now that you have more time in your hands, you can have more time in scaling your business faster. With more time in your hands, you’re in the position to prioritize more important business processes without the hassle of having to work on day-to-day inventory management and forecasting.

Your Amazon sales process gets even more efficient and less complicated. Imagine not having to call your supplier every now and then just to verify the status of your inventory or double-checking your calculations for what seem like hours. Everything that you need to know about the status of your inventory is on the dashboard and it appears quickly too!

Growth also becomes more predictable with the increasing reliability of business processes. Automated inventory forecasting builds reliability in your data and accuracy in demand. When you know what to expect, you make efficient time-based and qualitative decisions. Such predictability then boosts your Amazon sales.

Reduce costs

As mentioned earlier, you incur greater warehouse costs when your inventory isn’t optimized. Greater warehouse costs drain your cash flow.

How does automated inventory forecasting reduce costs? Because most automated inventory forecasting softwares have built-in demand forecasting, you don’t have to worry about stockouts or overstocking anymore. And we know how overstocking and stockouts affect your warehouse costs.

Finally, because your inventory is now optimized, there’s no need to expedite orders and pay for greater freight costs especially during high demand seasons.

 Build solid relationships with your suppliers

Supplier relationships are tricky. Sometimes you get along with them, sometimes you don’t. It’s often tested especially when one side doesn’t deliver well.

Harassing your supplier during high peak seasons that you weren’t prepared for or getting on their nerves with your uncertain decisions can also fare badly for your Amazon business.

How does automated inventory forecasting solve your supplier problems? First, you don’t look to them helplessly most of the time. Because you have a tighter grip on your business, you build better communication bridges with your supplier. It makes for easy compliance and better understanding of your needs. It also sets realistic expectations for both you and your supplier.

 Second, an organized Amazon business builds trust with your suppliers. You don’t want your supplier walking out on you when you’re making unrealistic demands. Worse, you could be building a non-profitable relationship with your supplier. As a seller, the lifeline of your business are your products. You don’t want to cut off your relationship with an otherwise effective supplier just because you are disorganized.

Automated inventory forecasting is the future

With more and more people taking to e-commerce to satisfy their buying needs, expect that Amazon will eventually have more and more customers by the day. According to a survey, Amazon isn’t going away anytime soon.

This means that innovation is the way to go. In order to run a successful Amazon business, getting on with the trend should be your number one priority.

This is why more and more businesses are taking up the option to use automated inventory forecasting softwares and have reported impressive massive results with the product.

While this may seem daunting for some, most automated inventory forecasting softwares are actually easy to use and install. You can easily set it up with your Amazon shop and the software will take it from there.

 These tools have dashboards where every data that you need to manage your inventory could easily be scanned. They also often include features like demand predictions, automatic inventory replenishment, and customized solutions.

 On the other hand, this type of software could be costly too. On the other, other hand, it’s a great trade-off that’ll help you manage your Amazon business better, and yes, bring in more sales as a result.

 Interested in investing in your own automated inventory forecasting software? Try AiHello.

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Corporate budgeting softwaremakes it easy to set up and manage personal budget. With the help of budgeting and forecastingsoftware, budgeting becomes a faster and more accurate task.

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Forecasting software only works for about 20% of a typical company's products. Why? The reasons may surprise you: http://perito-consulting.com/en/why-you-need-a-forecasting-plan-before-you-buy-forecasting-software 

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What are the Key Benefits of Forecasting Software

Demand forecasting software is the best option for all your inventory management, demand planning and better future prediction. 

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Transform Your Business with Business Forecasting Software

Grow your sales, devise a plan to meet customers' demands, and avoid stockout scenarios with forecasting software. Take the leap and move ahead of your peers. 

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Sales Forecasting Enables You to Generate Precise Forecasts

Never make these mistakes while forecasting sales with Sales forecasting software. Or else your projections will be hampered, and you will not get accurate numbers. 

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Avoid These Pitfalls & Generate Accurate Sales Forecasts

If you use sales forecasting software, these pitfalls can make your sales forecasting inaccurate. Avoid it and get the accurate forecasts to increase your sales. 

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Stop Making These Mistakes While Using a Sales Forecasting Software

Avoid making these mistakes while you forecast your sales with the assistance of sales forecasting software. Making these mistakes will hamper the accuracy. 

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Avoid these Pitfalls & Generate Accurate Sales Forecasts 

Without a doubt, all businesses want sales. They sell their products or offer their services in exchange for money to generate revenue for their businesses and earn profits. However, it is more challenging than it seems; to keep generating revenues, you need to forecast your sales and then plan to meet the figures.   

Many businesses generate sales forecasting annually and divide them into small monthly targets. Some work another way around; they generate monthly numbers, achieve them and aggregate them into an annual number. Whatever method you choose, your ultimate goal is generating revenue.  

Sales Forecasting is vital for the success of your sales teams. Forecast accuracy is critical for companies as sales is the only penny-generating process. Numerous companies rely on their sales teams and customers' feedback to predict their upcoming sales. The process seems quite efficient and correct to the naked eye, but it is not. Once you start analyzing the process with microscopic lenses, you sense that you incurred extra expenses or losses since your predictions were wrong. The only solution you have is to stop relying on these error-prone anticipations and trust Sales Forecasting Software.   

Over the years, sales forecasting software has given results more accurately than any other prediction mode. If you choose a reliable source like Avercast, the chance of accuracy increases even further. Avercast software forecasts with the utmost precision and allows you to forecast for up to 60 months (about five years) in the future.   

However, you must be aware of software for your Sales Forecasting. You need to know what features you want in your software and what things you should avoid, or getting carried away will not help.   

Here are some of the pitfalls of Sales Forecasting Software and how to avoid them:   

No hunching during decision-making: In hindsight, you should not have guessed; it can prove fatal for your revenue. Basing your sales prediction solely on hunching or guessing is as cruel as leaking your company's sensitive data because you will not make profits in both cases. Instead of thinking, make most of the sales forecasting tools and predict your demand based on some relevant logic and dates. Or else demise is inevitable. 

Refrain from making decisions based on partial or little data: Generating predictions based on your small data set can prove harmful. It is only sometimes right that what applies to the small set applies to everyone. Your prediction has a higher probability of getting busted open. Instead, start collecting data, validate it, make a more extensive data set, and then forecast. 

Avoid being rigid: Brittle materials tend to break easily, and so do sales numbers. Stop being strict with your forecasts. You must be flexible. The rigidity generally comes when you rely heavily on your past sales history; avoid that. Instead, use it for reference and generate the latest sales forecast. Also, you should be ready to make budget changes, make the most of the latest information you are getting, and witness sales growth. 

Pay attention to sales patterns: You cannot sell body warmers in summer. A customer behavior that you should comprehend and stop making in summer. Never let go of any patterns or insights you get from your customers. If you see a decline in sales of your product, instead of throwing it under the bridge for some implausible reason, conduct a root cause analysis to reach the bottom of the problem and solve it. 

Keep your past sales history: Even if you do not have advanced sales forecasting tools or a set sales forecasting process, you still have sales history. It is understandable to use your past data to generate forecasts. It tells you about how well you performed, where you performed well, and where you need improvement. However, as stated above, do not rely heavily on or only on past sales data, as it can be fatal. 

Failing to follow the AIDA model: Attention, Interest, Desire, and Action, a small b-school concept usually underrated or ignored. Consistently follow the model to sell systematically. You create awareness of your product or grab customers' attention. If the product is intriguing, it will generate interest, the desire to buy rises, and customers will buy. The decline is near even if you fail to tap any one element. 

Software-experienced business personnel can only hunch the future with a maximum of 100% precision. However, efforts are being made perpetually. Avercast, with its 250+ statistically advanced algorithms, allows you to forecast with up to 99% precision. Doing that will not only increase the productivity of your forecast but will also push you in the right direction to witness the continuous growth of your business. 

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Demand Forecasting is a Technologically Backed Up Way of Forecasting

Demand forecasting tools effectively use data to forecast. Encapsulated within Demand Forecasting Software, it is essential for avoiding stock in and stock out. 

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Demand Forecasting Software an Art of accurately Forecasting Demand

Demand Forecasting Software plays a key role in the entire process of demand forecasting. It uses the validated data and current sales trends to predict future orders. 

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Stay ahead of the competition and prepare your business for the future with accurate business forecasting. Learn how.

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Choosing the Right Business Forecasting Software