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Demand Planning Software Uses Past Data to Forecast accurately
Demand Planning Software Uses Past Data to Forecast accurately

March 9, 2023

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The art of identifying new projections for your product is called demand planning. And if demand planning is an art, then demand planning software is your canvas. So, what is it that makes demand planning so essential for businesses? To understand it, let’s say you are hosting a Christmas party at your place and have invited around 30 guests to the gathering. When deciding the quantity of food, you would consider every guest, and based on that projection, you will act ahead.   

 

Similarly, a business cannot just start producing goods without any projection. More products will result in extra storage space, tying your capital with maintenance, while fewer products and you will lose customers and start bleeding profits. Demand planning is critical for determining prediction, allocating resources, and inventory management.   

Running a business is a long shot from a 30-guest party where running out of food can still have substitutes. Once you go out of stock, your customers will likely go for your competitors. It is critical to implement demand planning systems. One key question that still needs an answer is what type of data demand forecasting software needs to forecast accurately.  

The fundamentals of demand planning  

Demand planning is an essential supply chain management or optimization process. It uses data as input, which is necessary to maintain the right balance between supply capabilities and future demand. The software considers external factors like economic affairs, global trends, and market behavior during forecasting.    

Importance of demand planning  

You don’t want to keep your customers waiting or be spending in excess. Demand planning software becomes critical for reducing your inventory expenses and tracking inventory efficiently.  

Why not use excel and the already established planning method?  

One of the most asked questions is why not stick to the existing forecasting method. While the whole structured demand planning saga began with excel, that is now an antiquated method, surpassed by new and advanced algorithm-enclosed software. Spreadsheets are not accurate anymore and can be quite error-prone. In contrast, TransImpact’s demand planning software utilizes more than 250 advanced statistical algorithms, ensuring accuracy and improving overall productivity.  

 

Demand planning software needs data. But what kind? You must have piles of data, but are they all relevant?  Here’s an example: if you are a steak distributor, people who are vegan or vegetarian do not concern you, or do they? So, will you be feeding that data into your system? Absolutely not!  

Similarly, once you have the data, you need to validate it first and then input it. One of the significant data sets is past data. This set may consist of customers who already are your consumers or who have shown interest in your product in the past or potential customers who returned from your website at the checkout.  

Predictive analysis is a well-known branch of data analytics that uses past or historical data to forecast. Does that mean past data gives you the most precise forecast? Well, imprecisely precise. Past data give you an upper edge while forecasting because you already know most trends the market follows, like spikes during holidays or declines during off-seasons. 

One key thing is whether or not your acclaimed best-demand planning software mixes the current market trends and other external factors while forecasting. We know our software does.  

With almost 99% forecasting accuracy, our software enables you to forecast precisely for the present and up to 60 months in the future. If you are still forecasting your demand based on your intuition, it’s as if you are using crystal balls or magic wands in demand planning. Forgot the guessing. Go with the data and transition from spreadsheet to demand management solutions. 


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