Demand Forecasting Software: Best 2022 Practices and All you Need

Demand Forecasting Software
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What Is Demand Forecasting Software and How Does It Work?

A demand forecasting solution is exactly what it sounds like; A management software that enables a business to reliably forecast future demand for a product, allowing them to make the best decisions possible about their supply capabilities either for free or a price ( e.g: Gartner Demand forecasting software).

Any experienced business professional can tell you that you can’t always predict the future. However, using the right demand forecasting tools will help you achieve the next big thing.

So basically, you can make long-term forecasts about anticipated demand in real-time by combining historical sales data with applicable business knowledge about the ebbs and flows of your sales processes; including statistical analysis. You should make the best possible decisions now to help you stay as competitive as possible until you have a clear sense of what you’re planning for in the next six months or even a year.

Furthermore, depending on your needs, you can select from a variety of demand forecasting methods. This includes those that report on stock and overstock situations; as well as those that cover other valuable information that would otherwise go unnoticed.

But the most important thing to remember is that this form of solution is a surefire way to avoid running out of a product ahead of a particularly busy season. Or on the other hand, getting too much stock on hand to the point where supply significantly outweighs demand. In any case, both scenarios can have significant long-term consequences for your company/business.

Inventory Forecasting vs. Sales Forecasting

It’s also worth noting that there are different types of forecasting solutions available depending on the type of business in question– especially in terms of B2B and B2C solutions.

For example, inventory planning software and demand forecasting software are often used interchangeably. They are, however, two distinct concepts that should always be viewed as such. Demand Forecasting software, as the name suggests, aims to assist you in reliably forecasting potential demand for a product or service. Sales forecasting, on the other hand, aims to assist you in predicting real sales over a specific time span, making each useful in its own way.

In the same vein, manufacturing forecasting software focused on demand is unique in that it must account for a broad range of external variables. These variables include certain promotional activities that may have an impact on demand. Inventory forecasting software, on the other hand, performs better when revenue data from incidents that will not occur again in the future is removed.

Moving on, if your company recently ran a campaign related to reopening following COVID-19 closures, that form of event may certainly not happen again (one would hope). To prevent potential forecasts from being tainted, you should delete the knowledge from your inventory replenishment solution.

So, whether you need demand forecasting software or inventory forecasting software will be largely determined by the type of company you operate. B2B businesses would almost certainly need to use an inventory management system, while B2C businesses would be more concerned with the sales side of the process.

Demand Forecasting Software

Image Credit: iStock (Demand Forecasting Software Gartner)

It’s already pretty obvious that there are a variety of other methods that can be used to forecast demand. This is in addition to paid software services. t’s just that they do not have everything you need to produce the most accurate demand forecasting methods for your business.

Many businesses attempt to save money by manually entering data and performing calculations in programs such as Microsoft Excel, Google Sheets, and others. On the surface, there’s nothing wrong with this strategy – but doing it without a dedicated piece of software can be boring, to say the least. This route demands that you must set up all by yourself. Plus, you’d need to feed every piece of data manually. This will take a significant amount of time. And as a result, you’ll be potentially diverting yourself from more critical tasks that will generate revenue for your business.

Similarly, because of its manual design, one of the demand forecasting Excel drawbacks is that it is an error-prone operation. You run the risk of acting on insights that are not correct in any way if you make a mistake while entering data. Worse still you could come up with wrong estimates to predict potential demand. This can exacerbate an issue with demand and inventory levels, potentially putting the company in a position from which it would be difficult to recover.

Are there any free demand forecasting softwares?

Depending on your requirements, there are free forecasting software resources to choose from. Although this is a significant improvement (free version) over manually entering data into demand forecasting software, in the vast majority of cases, it is simply not worth your time.

Many people are unaware that free demand forecasting softwares are just “free” up to a certain stage. After a certain amount of time has passed or you’ve entered a certain amount of data, you’ll be forced to pay for an upgrade. The idea is to hoard some important information they would only release after the upgrade. Basically, if you don’t, the free demand forecasting software tool becomes useless. Beyond that, all of the data in the system is effectively stuck inside, returning you to square one.

The Alternative

So rather than depending on a free demand forecasting software solution, you should consider any of the paid options. Consider this an investment in your company’s future. But more importantly, think of what you could accomplish if you knew roughly what your demand levels would be at various times throughout the year. You’ll be ensuring that you have enough goods on hand to optimize your sales potential. This is only achievable if you know when demand is high.

The same can be said for the other way around. If you know ahead of time when demand will be poor. This means you can focus your efforts on determining why that is the case. You may also apply this knowledge to other aspects of your business, such as your marketing campaigns. Eventually, you might run a promotion to see if you can get things to pick up ahead of an especially unpleasant time. All of these are opportunities ordinarily you wouldn’t have had access to.

In the end, demand forecasting software is critical. Basically, the potential revenue from this data will far outweigh the cost of the software. Furthermore, these types of strategies also produce the most significant benefit of all. This includes freeing up as much of your precious time as possible so that you can concentrate on the things that really need your attention.

Demand Forecasting Software Examples

Finally, before deciding on which sales forecasting tools to use, you should be aware of your choices. Besides that, you should also be aware of some of the possible drawbacks they might entail.

#1. JDA Software’s Blue Yonder:

This is a popular solution that is used by several companies today. It’s a cloud-based warehouse inventory management system that can be implemented at any point in the company’s lifecycle. In general, Blue Yonder is intended to assist you in addressing the most important factor that you can control across your lines: direct labor. You put yourself in a much better position to ensure that all employees are completing their tasks in the most efficient way possible. By using the tool to configure your environment you are almost sure of maximum process efficiency.

Furthermore, it’s a warehouse management system and a labor-management system bundled into one. This gives you access to the actionable data you need for accurate demand forecasting.

In the tail end, you can use the information you gain about potential demand and sales to achieve the following.

  • Train,
  • Incentivize, and
  • Prepare for the best possible associate results across the board.

#2. Gartner Demand Forecasting Software:

This is a demand forecasting solution/software that was designed and developed by to experts at Gartner Research. For the most part it is another viable option.

The tool focuses on assisting you in addressing a specific challenge in the most efficient manner possible. This includes situations in which end-to-end supply lead times are dangerously close to exceeding the amount of time that your paying customers are willing to wait for delivery of their products.

This is a dangerous situation that can easily spiral out of reach. However, with methods in the Gartner Demand Forecasting software, this is totally avoidable. This is achievable by the assistance it offers in developing a better forecast. Eventually these forecasts prove useful in all upstream supply chain decision-making.

Why these Decision-making are Important

When companies lack a broader master plan, they often find themselves dealing with a slew of disconnected projections. And oftentimes, it becomes late before they know it. This leads to inconsistencies in decision-making in your supply chain. In the end, it pushes you farther away from your overall objectives rather than closer to them.

#3. Canopy.io:

This is another popular solution out there that’s worth giving a shot.

Billed as a revenue leadership hub in any sense of the word, Canopy.io is undoubtedly one of the most relevant. Canopy.io is a powerful tool that integrates, analyzes, and even constantly tracks every data point in your revenue team, so you can make smarter, more educated decisions anytime you have the chance. This also ensures that any sales leader in your company has access to all of the actionable data they need to achieve the most predictable revenue growth possible, which is critical for today’s successful business.

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