What is Demand Planning?
Demand planning is a supply chain management process of forecasting, or predicting, the demand for products to ensure they can be delivered and satisfy customers. The goal is to strike a balance between having sufficient inventory levels to meet customer needs without having a surplus.
Demand Planning & ERP Software
One of the many functions of Enterprise Resource Planning (ERP) is to manage demand and supply within the business. YGL BeyondERP software that features advanced demand planning can help supply businesses optimise inventory levels in order to guarantee a timely delivery to customers.
1. Demand Forecasts
Knowing the volume of the orders you will receive and the time at which you will receive them can help Janitorial and cleaning supply companies plan accordingly. Incorporating historical sales, the current sales pipeline and opportunities from your CRM into the overall ERP forecast increases the accuracy and dependability of your production and buying levels.
2. Adequate Cash Flow
Knowing the peaks and valleys in your demand can help your business manage cash flow. Money tied up in inventory reduces the opportunities to expand in other parts of the business, such as sales and marketing.
3. Efficient supply chain scheduling
An efficient supply chain schedule will optimize your inventory levels. Overstocking takes up space in the warehouse, increases obsolete inventory, and ties up cash. Under stocking alienates customers, creates emergency production runs and last-minute buying which results in increased costs and lost business.
Why is Demand Planning Important?
If product isn’t available for customers to purchase because it’s out of stock, businesses lose out on revenue, and over time, they could lose the customer to a competitor. On the other hand, sitting on a slew of unused inventory incurs both space and production costs unnecessarily. With demand planning, business leaders can stay in front of market shifts and make more proactive decisions, while being responsive to their customers’ needs.
The Future of Demand Planning in the Supply Chain
Like many business needs, supply chain and demand planning are going digital. Advances in applications of machine learning within the supply chain are making it possible to adapt and update forecasts in real time, allowing inventory to run leaner, without missing the mark on demand.
For supply chain professionals, understanding how to use digital enterprise architectures and implementing artificial intelligence and machine learning programs that can help optimize a lean, agile and data-driven approach will reveal new ways to cut costs in operations, boost revenue and offer a greater competitive edge.
A better-connected supply chain means demand planning can be conducted even more in the moment. When implemented well, demand planning can be a pivotal process in boosting a supply chain’s profitability.
ERP software with demand planning and a CRM with real-time forecasting can do a great deal to keep your business running smoothly. It ensures optimized inventory levels, which helps you save money and time, improves customer loyalty, and reduces general overhead expenses. For further information regarding the best ERP solution, contact YGL today!