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Demand Forecasting Software
Read more about demand forecasting methods here!
What Is Demand Forecasting Software?
A demand planning solution is exactly what it sounds like – a piece of management software that allows a company to accurately predict the upcoming demand for a product, all so that they can make the most informed decisions possible regarding their supply capabilities.
Any seasoned business professional will tell you that you can’t necessarily predict the future – the right demand forecasting tools, on the other hand, can essentially help you accomplish the next best thing. By using historical sales data along with relevant business information pertaining to the ebbs and flows of your sales processes, combined with statistical analysis, you can generate long-range predictions about expected demand in a real-time way. Once you have a better idea of what you’re preparing for in the next six months or even a year, you can make the best possible choices now to help remain as successful as possible.
There is a wide array of different demand forecasting tools available for you to choose from depending on your needs, including ones that report on stock and overstock situations and that offer other important insights that would have otherwise gone undiscovered. But the key thing to understand is that this type of solution is a surefire way to avoid running out of a product ahead of a particularly busy season, or having too much stock on hand to the point where supply dramatically outweighs demand, all of which can have major benefits for your business as a whole moving forward.
Inventory Forecasting vs. Sales Forecasting
It’s equally important to note that there are different types of forecasting solutions out there for you to choose from based on what type of company you are – particularly in terms of B2B and B2C solutions.
Inventory planning software and demand management software are two terms that are often used interchangeably, for example, but they are two very different concepts and should always be treated as such. Demand management software, as the name implies, tries to help you predict the future demand for a product or service as accurately as possible. Sales forecasting, on the other hand, attempts to help you predict actual sales for a given period – making both useful in their own unique ways.
Manufacturing forecasting software based on demand is different in that it has to correct its predictions for a wide array of external factors, like certain promotional events that may impact demand itself. Inventory forecasting software, on the other hand, works best when you remove sales data pertaining to events that will not repeat again in the future. So if your business just ran a promotion related to reopening after COVID-19 closures, obviously that type of event would not repeat (one would hope). You would want to remove that information from your inventory replenishment software to avoid it corrupting future predictions.
So again, whether you need demand management software or inventory forecasting software will vary largely depending on exactly what type of business you’re running. B2B organizations would likely need to rely on an inventory planning solution, whereas B2C organizations would be more focused on the sales side of the process.
Demand Planning Tools
At this point, it is important to note that there are a plethora of different tools that can be used to do demand forecasting besides paid software services. It’s just that they may not offer what you need to generate the most demand forecasting methods possible for your business.
A lot of organizations try to save money by manually inputting data and creating calculations in services like Microsoft Excel, Google Sheets, and more. There’s nothing wrong with this approach on the surface – but doing this without a dedicated piece of software by your side can be tedious, to say the least. Remember that you have to set up absolutely everything yourself and all data must be inputted manually. This will take an enormous amount of time, potentially taking you away from more important tasks that will actually be used to generate revenue for your business.
Likewise, one of the inventory forecasting Excel limitations is that it is an error-prone process because of its manual nature. If you make a mistake when entering data, or if you try to generate the wrong calculation to determine future demand, you run the risk of acting on insights that are themselves not accurate in any way. This can actually take a problem with demand and inventory levels and make it even worse, potentially creating a situation that will be difficult for your business to recover from.
Is Demand Forecasting Software Free?
It should also be pointed out that there are indeed forecasting software free tools for you to choose from depending on your needs. While this would absolutely be a step up from entering information manually using demand planning tools Excel or a similar solution, in the vast majority of all situations they simply won’t be worth your time.
A lot of people don’t realize until they’ve already committed to a solution that free forecasting tools will only be “free” up to a certain point. Once a specific period of time has passed, or once you’ve entered over a certain amount of data, you will be forced to pay for an upgrade to get the information you really need. If you don’t, the demand forecasting software free tool essentially becomes unusable. Not only that, but all the data you’ve already entered is essentially trapped inside – thus putting you right back where you started.
Rather than relying on an inventory forecasting software free solution, you need to see some of the paid options for what they really are: an investment in the future of your business. Think about what you would be able to do if you knew reasonably well what your demand levels were going to be during specific points of the year. If you know when demand is high, you can make sure that you have enough products on hand to maximize your revenue potential for the given period.
Likewise, the reverse is also true. If you know when demand levels are going to be low well in advance, you can then set your mind to figuring out why that may be the case. You can even use this insight to feed other areas of your business, like your marketing campaigns. You could run a promotion ahead of a particularly slow period to see if you can get things to pick up. All of these are opportunities that you likely wouldn’t have access to via other means.
In the end, demand forecasting software is important and the money you bring in from this information will be more than worth the price of the software itself. Plus, these types of solutions often generate the most important advantage of all: freeing up as much of your valuable time as possible so that you can focus on those matters that truly need your attention.
Examples of Demand Forecasting Software
Finally, before you make your decision with regards to which sales forecasting software to go with, you should be aware of what your options are – along with some of the potential limitations that they bring with them.
One prominent solution that is used by many different types of businesses today is Blue Yonder from JDA Software. It’s a cloud warehouse inventory management system that is built to support implementation at any stage of your organization’s lifecycle. Generally speaking, Blue Yonder is designed to help you tackle the primary factor that you can control across your lines: direct labor. By using the tool to configure your environment for maximum process efficiency, you put yourself in a much better position to make sure that all employees are completing their tasks in the most efficient way possible.
It’s a warehouse management system and a labor-management system all rolled into one, putting the actionable insight you need for proper demand forecasting at your fingertips. The knowledge that you unlock about future demand and sales can be used to train, incentivize, and even plan for the best possible associate performance across the board.
Another viable option takes the form of Gartner Demand Planning, a solution designed and developed by the experts at Gartner Research. It, too, is designed to help you tackle a specific challenge in the most efficient way possible: those situations when end-to-end supply lead-times may be dangerously close to exceeding the amount of time that your paying customers are willing to wait for their products to be delivered. This is truly a slippery slope that can quickly get out of control, and these demand solutions can help stop that from happening by helping you create a better forecast to be used in all upstream supply chain decision making.
When organizations lack this type of larger master plan, they often begin to deal with many disconnected forecasts before they even realize it. This causes conflicting decision making across the entirety of your supply chain, putting you farther away from your ultimate goals instead of closer to them.
But one of the most important such solutions of its type available to purchase now is undoubtedly Canopy.io – a product that is billed as a revenue leadership hub in every sense of the term. Canopy.io is a powerful tool that connects, analyzes, and even actively monitors every data point across your revenue team – all so that you can make better and more informed decisions whenever you have the opportunity to do so. This also helps make sure that every revenue leader across your enterprise has access to all the actionable information they need to drive the most predictable revenue growth possible, which is absolutely essential to the successful modern-day organization.
In addition to sales forecasting, Canopy.io also includes innovative features dedicated to coaching and even Augmented Revenue Analysis. To that last point, Canopy.io is actually the ONLY sales forecasting software that is powered by Augmented Revenue Analysis technology. This means that various signals act as essential your revenue team’s GPS – providing you and your people with the ability to stay productive and stay ahead of risks that could impact their pipeline down the road. This includes not only opportunity risk identification but also pipeline movement, KPI monitoring, and more – all delivered via real-time notifications and customizable e-mail digests.
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