What is Demand Planning?
Demand planning is a crucial step in the operations of any given supply chain. Using forecasts, this software allows companies to make effective plans to meet the predicted demand. These plans can cover many different aspects of the operations of a company.
Demand planning can allow a company to better plan their procurement efforts, inventory, marketing plans, distribution, and more. Having a reliable prediction of future demand allows companies to plan with confidence. Not only do they experience operation smoothness, but demand planning is financially beneficial as well.
No matter the industry you may be in, the market is in a constant state of change. There are currently a few companies who are taking large measures to ensure they are able to meet the demand of their consumers. Some companies are investing hundreds of millions of dollars into their ERP systems.
One of these companies is Clorox, yeah, like the bleach. Clorox has faced costs 7 times higher than typical, so they knew that had to try something. After using the same system for 20 years, they have decided to switch it up. They have a 5-year plan to improve in multiple ways, and they’re planning to spend $500,000,000. Clorox is striving to increase their digital capabilities, and to understand data in a new way.. While implementation of their new ERP system won’t be immediate, over time the financial results will be well worth it.
Another example is the popular beauty supply store Ulta. Ulta offers beauty products ranging from high to low end. They have a lot of inventory, and their customers love the store. Ulta wants to reshape, improve, remove inefficiencies in their practices, and more. They’re also entering into a long-term situation, as they plan to spend $180,000,000 on their 3 year plan. As Ulta enters this new plan, they hope to see financial and operational benefits.
The two example above show that demand planning is important. These are huge corporations, and they know the importance of demand planning. Now, the third example of a company who is ready to benefit from demand planning software, is you!
You may not have millions of dollars to invest, and that’s okay! Those examples were extreme, but not all businesses that implement demand planning and forecasting software have that deep of pockets.