Every time retailers seek assistance with issues that relate to management of inventory, they are often concerned about their stocks level quickly running out, which can result to sales that are lost as well as customer service grievances, or else about over-stocks that lead to slow turnover of inventory and dead inventory buildup. As a matter of fact, over-stocks and out-of-stocks are really the other side of an inventory management coin that is one and the same.
Any effective scheme to address these issues needs to focus on the key structural reasons behind why such inventory management issues exist. The best inventory management starts with prompt, detailed, accurate demand assumptions.
Given the constantly changing business atmosphere of today, organizations must be quick and agile to respond to changes in the market along with internal factors in order to reduce losses in addition to leveraging opportunities. Demand planning software becomes essential to determine real time customer demand as well as changes in the market, in addition to the ideal balance that it creates between demand and supply. There are more benefits, however, that demand planning software has to offer, which are discussed below.
It Assists in Exact Revenue Forecasting. A demand planning software that is good help in exact revenue forecasting through a correct analysis of market demand along with forecast outcomes according to that. The absence of correct information as well as software to sort that information out, companies deliver products by assuming the demands of customers. Others even take inadequate data that had not been correctly processed to arrive at conclusions. As a result of guesswork, such data or information does not bring favorable results all the time. Such software helps to analyze data correctly and then accordingly provides a forecast of the revenue.
It Helps to Align Inventory Levels. Whenever market demand is huge, an organization can miss out on opportunities to fulfill it by itself without the right inventory in place. By being aware of the likely future increase or decrease in a product's demand, they will be able to align their inventory levels in order to take advantage of the benefits as well as to satisfy their customers.
It Improves a Product's Profitability. If the demand for the product is low, an organization will probably decide, or not, to proceed with it. But, in case it is headed towards bringing in greater profit margins even with its low sales, then it is going to be worth the investment in time as well as money. The use of demand planning software will enable companies to identify how to improve a product's profitability.
It Enables Re-planning Derived from Given Data. It is essential to be watchful of the market throughout a product's production as well as marketing life cycle. A simple reason why re-planning or altering strategies becomes necessary is to be able to capture the maximum attention of consumers and overcome the competition as a result. When decision makers consider the changes, they will be able to amend their approach or strategy in order to meet the business goals that they have.