Demand Planning and Forecasting Methods That Can Make a Difference

When it comes to demand planning and demand forecasting, the goal is to get to the perfect balance between supply and demand. However, as with anything that is deemed “perfect,” this balance can be supremely hard to find. For a lot of companies, successful demand planning is something that will look different each week. It is always changing and adapting to the current situations. Fortunately, there are several methods that can help your company increase its success in demand planning.

Market Research Method

Market research usually involves sending out surveys and other forms to get feedback from customers. These surveys will open an eye into your customers’ minds, letting you know how they feel about your current supply/demand balance. This method can take a lot of time and resources, but there are also tools that you can use to make it easier, such as programs that can help you collect data from both the consumer and the local market.

Predictive Sales Analytics Method

This method’s main objective is to help you estimate current demand levels and future demand levels. However, this method will also help you understand which factors have been affecting sales and predict how customers might react to different conditions in the market. With the correct tools, this method will let you examine data from several different sources, combine that data, and then develop predictive models for sales.

Historical Data Method

Past sales data is crucial to any company, due to the fact that this information provides plenty of useful information to that company. Not only will this data provide you with an overall estimate of demand levels, but it will also allow you to see how customers have reacted in the past to situations that may arise again. For instance, if the demand for your product went up during the last three major hurricanes, you might want to consider increasing your supply for the next hurricane season.

Demand Sensing Method

This is easily one of the most efficient methods of demand planning, due to the fact that you are able to see demand levels in real-time. This will give you an advantage when there are sudden changes in demand levels, allowing you to react very quickly and allowing your supply chain to react to these quick changes. This information can also help your company increase its demand planning success as your company gains experience in dealing with these quickly fluctuating demand levels.

Macro-Forecasting Method

This method of demand planning involves looking at the trends of the overall economy to determine estimates of future demand levels for your products. This method can be very useful in giving your company more information to base your estimates on, hopefully resulting in more accurate results. The macro-forecasting method helps you better monitor factors that can have an effect on your supply chain, such as the availability of any raw materials that you may need.

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