Why is demand forecasting and planning important for businesses

Shikha Samant -

Demand forecasting and planning helps businesses predict the demand of products by customers. The more accurately you forecast your demands and plan accordingly, the more satisfied are your customers.

Below are a few advantages of demand forecasting and planning:

  • Customer Satisfaction– If you can forecast the product demands of your customers in advance, you can definitely meet your customers’ expectations. If you address your customers’ requirements and issues efficiently and timely, you would be getting customer loyalty and satisfaction, free of cost publicity, long-term relationship and last but the not the least, a thriving business.
  • Reduction in inventory costs– With the right inventory management system you can plan and forecast your inventory better. You can report and track stocks real-time, give a complete oversight of the business and help in better decision making. Additionally, you can avoid overstocking or under-stocking that has a major impact on the overall cost and revenue of the company. Depending on the demand of the inventory, you can decide as to what type and quantity of goods/raw materials needs to be in stock. Inventory planning and forecasting are crucial for an enterprises’ performance. For instance, factors like seasonal demand, market trends, and economic conditions can cause change in demands. With automated and accurate demand forecasting you can efficiently keep a tab on the stocks.
  • Cash flow optimization: Accurate demand forecasting has a positive impact on your working capital that can be used efficiently for other important purposes. It also helps in preservation of cash flow. For instance, If you cannot predict the demand efficiently you may end up overstocking that which surmounts to extra expenditure. With proper planning and forecasting you can make better use of that money in equipment maintenance, hiring better resources and so on.

Deskera MRP has a demand forecasting and planning module that delivers a robust and cost-efficient demand forecasting and planning solution to manufacturers of all sizes. It accurately creates and manages make-to-order forecast reports and forecast criteria templates. By defining and maintaining forecast methods, the tool maps key results to different work orders and monitors stock availability. Additionally, the demand forecasting module further analyzes various seasonal trends and alpha factors for accurate production forecasts.

Some of the key features are mentioned below:

  • Create Criteria Template: Producing a forecast begins with defining a criteria template. Criteria templates indicate which sales history to analyze and how the system should perform the forecast calculation. The tool keeps a record of criteria template details such as title, forecast ID, product name, product ID, product type, quantity, forecast year, and many more.
  • Criteria Template List View: You can view the list of existing criteria templates along with graph view, map to work order and map to sales order details.
  • Define and Maintain Forecast Methods: The tool helps keep track of forecast method details such as method name, method ID, method type, alpha factor, trend factor, year of history and more. You can assign forecast methods to work orders. Maintain forecast methods based on trends and analysis.

Deskera MRP Demand Forecasting and Planning module improves forecast accuracy and responsiveness to ever-changing customer demand. Using this module, you can analyze sales shipment history, calculate forecasts and update demand for MRP.