Why Demand Planning is Fundamental For Your Business
And why demand forecasting helps improving demand planning
Getting an overview of future sales and possible inventory through the implementation of demand planning software is vital to the long-term sustainability of the company. Demand planning is the basis by which a business owner determines how healthy his company will perform in the nearest future and it also helps him to determine inventory, purchase and other replenishment parameters. If you understand what will be sold, when the goods or services will be sold, the process and time for closing major deals, then, your business will continue to be profitable no matter the competition in the marketplace.
Apparently, business owners face the challenge of not being able to strike a balance between having the right amount of stock and sales. This makes them experience out-of-stock problems when demand is relatively high. If this situation continues, customer satisfaction will depreciate, and sales will gradually slow down. However, you don’t need to be told the implications of such developments in your business but with good business intelligence software like the Intuendi demand planning software, every product category, sub-category, SKU, and style is put into consideration in other to get the sales trend and future opportunities. The software also considers some potential negative impacts that may decrease sales such as improved product/service introduction, increased competition, and Government policies. Analyzing your companies demand will open you up to understanding the needs of your key customers and the buying characteristics of other customers.
Many companies face the following challenges because they have not integrated demand planning in their businesses.
Most entrepreneurs lose their customers to the competition because of out-of-stock or lack of manpower to deliver the required services at the right time. If you have a clear understanding of your customer’s demand, it will help you to get their loyalty over time, and this can sustain your business success. With demand forecasting, you can identify future changes in the market and take proactive actions always to be exceptional.
This can lead to huge losses when it occurs rapidly in a company. The unsold items will cause ‘cash trapping’ to your company. You may not have the cash to order for new products, and customers may begin to have the impression that your goods are obsolete and this will dramatically reduce sales.
Not Keeping Up With Change In Technology
Technological change and its impact on the company’s products and services are key factors that can work against the success of the company. Being static will eventually lead your company to downsize like what happened to Nokia. So you need to be dynamic and develop the ability to accept change. Being flexible in business will help you understand that you cannot operate your business in a vacuum. Therefore you should use the software to determine the reaction of the market if there is a significant change in Government policies and what influences consumer behavior. With our demand planning software, you will not have such bad experience in your business; rather you will be at the top of the game. Another major advantage of the demand forecasting software is the determination of cash flow projections.
Determination of Cash Flow Projections
Working out an accurate cash flow projection is one of the most fundamental aspects of good business financial management and financial planning. This sustains small businesses since most of them does not have cash reserves to be sustainable when there are sales or cash flow challenges. With knowledge of cash flow projections, small businesses can get themselves prepared for future cash flow crisis. Forecasting cash flow will help you as a business owner to manage expenditure and remain viable as income slows down. In addition to that, you will continue to maintain the business relationship with your top customers who are the life wire of the business until the business start recording positive cash flows.
Implementing the right demand forecasting strategies with one of the best software’s in the market which is Intuendi demand forecasting software which will enable your business to keep expanding while the business of your competitors keeps contracting. So the decision is yours to make, why not contact us now if you need any clarification.