Demand planning with ERP software
Demand forecasting and planning with the help of ERP software
Demand, when accurately forecasted, results in customer satisfaction and no additional inventory costs for retailers. This is an ideal situation, challenging to achieve but not impossible. You can attain the right balance between inventory stock and customer demand with ERP software.
An effective ERP software helps you with demand planning and forecasting. It aids in predicting stock requirements of your products and services to purchase from vendors accordingly. It analyzes customer purchasing habits and historical purchases to understand customer demand.
The key variables or factors to consider while forecasting and planning demand are:
Historical sales numbers
Tracking historical month-to-month sales gives you an approximate idea of this year’s monthly sales. You must provide a small percentage increase on the previous year’s numbers for the annual targets. Generally, consider two to five years of historical numbers to make predictions.
You can stock up your inventory based on these historical monthly figures. Communicate the demand for products to your suppliers accordingly for the following months.
You must add the difference that seasons bring to sales of some products. For example, woollen clothes and jackets’ sales are higher during winters. The demand for school bags and stationery items is higher just before schools reopen.
It’s not only about the seasons but also any other trend that affects sales of specific products. For example, when there are online sales by eCommerce firms, the sales of brick-and-mortar shops go down. Consider these factors in your demand forecasts.
Based on the seasonality, you can stock your inventory levels just before the season or festival. And once the season ends, either you sell it at a discount or send it back to the warehouse.
You must consider the business rules or limitations affecting your demand planning. These limitations may relate to:
• Warehouse space
• Arrangement of products on different shelves in different stores
• Promotional offers or tactics
• Inventory levels where the next order is placed to reduce freight charges
• Grouping of products into segments for demand planning
Suppliers and vendors in your industry of operations will have enough knowledge about the change in demand for products. They have insights on the availability of products, customers’ response to newly-introduced items, demand during specific times, etc.
Use your vendors’ expertise in the industry by considering their advice or recommendations on product demand and supply trends.
Other external factors can also affect the demand forecasts. For example, the country’s economic situation may be deteriorating, reducing the overall demand in the market. Alternatively, the production of raw materials is sluggish, or imports are not occurring because of some border issues.
Many external factors not under your control can affect customers’ demand or supply of products. Factor in these external influences while forecasting demand.
How can Websys Infotech help you?
These are the key variables that affect the customers’ demands. You must factor in these variables while planning demand and ordering stocks. An apt ERP software can help you with accurate demand forecasting and planning so that your customers are satisfied with their visit to your store.
Websys Infotech’s ERP software is one such solution for your accurate, on-time demand planning needs. Our ERP solution makes accurate forecasts that you can depend on for placing orders to your suppliers. Accurate demand forecasts help with better cash flow management.
With our ERP software, your money is not stuck in additional inventory that is not getting sold. Also, you do not face missing sale opportunities because of no item on your shelf. This ERP software enhances supply chain scheduling with no emergency runs or last-minute purchases, leading to efficient processes.
Make your demand forecasts accurate and on time,
With Websys’ ERP software.