With the explosion of big data technology, companies now have access to data sets that were unheard of in the not too distant past. This big data can be converted through demand planning software into highly effective and informative insight into the markets.
It is important to realize that today’s demand planning software is not just information about likely trends. It is developed through extremely large data sets, allowing for the elimination of outlying trends and factors which can skew or distort the information using smaller data sets and numbers.
To get the big picture on how demand forecasting can assist any type of business, there are some specific issues that are essential for any business to consider.
Manufacturing and Processing
In the manufacturing and processing industries, the information obtained from demand forecasting and planning is instrumental in gearing up production according to demand. Seasonal variations in the market can be fine-tuned, allowing the facility to have the necessary inventory on hand to meet the needs of their customers, while also avoiding issues with overproduction which can result in lower profits.
The other side of the equation to consider is the use of demand forecasting as a way to purchase raw materials at the lowest possible prices. In understanding the supply and demand cycles, more effective decision making is simplified for manufacturing companies.
Retail and Sales Businesses
Retail and sales companies have been using demand planning software and market forecasting for decades. While particularly important for seasonal items and inventory, it is also effective in managing inventory, ordering and in optimizing supply chain systems throughout the year.
As retailers become more effective at using this software, they can avoid issues with over-ordering of seasonal inventory or of failing to have enough inventory on hand. Sophisticated software is able to account for all market impact issues, eliminating the guesswork of years past.