Investing in a good demand planning tool and using it to create accurate forecasts for your inventory is a great start. However, relying on an automated solution does not prevent you from making these common mistakes that could cost your business money.
- Some businesses make the mistake of using demand planning solely to make their distribution channels more efficient. You will get more out of your investment if you rely on the data to optimize the production process as well. Demand planning can for instance be used to determine what your manufacturer should be producing.
- Do not adopt a demand planning model that is too simplistic. Relying on an automated tool will give you access to detailed reports regarding demand but you should use this data to create a comprehensive inventory forecast. Take factors such as products, time and locations into account.
- Failing to establish some best practices for demand planning could lead to incorrect data. Since inventory forecast tools gather data from several departments and business processes, make sure best practices are relevant for each department or process.
- Use your demand planning tool to look for patterns that repeat themselves on the long-term instead of using it to create inventory forecasts that will be used no the short-term. Focusing on the short-term helps you deliver products on time but patterns allow you to improve business processes.
- Do not optimize business processes too soon. Gathering relevant data takes time and it might be months before the reports created by your demand planning tool are comprehensive enough to be helpful.
Getting the most out of your demand planning tool requires you to become familiar with its features and with several concepts related to inventory forecasting. You can easily avoid these mistakes by working with the right demand planning software provider. You should contact us at MaxQ Technologies to learn more about the solutions we offer.