Demand Planning on Inventory Management

Estimated reading time: 3 min

As a manufacturer or service provider, your sole responsibility is to ensure that your product and service development is aligned with customer needs and desires. As a result, demand planning and optimization should ensure that marketing and sales are in sync with customer expectations and demand. Once you’ve determined what customers want and which products are in high demand, it’ll be much easier to procure materials on time and optimize your production to reduce lead time.

Any business seeking to increase customer satisfaction must invest heavily in software that assists in tracking sales trends and capturing customer needs. Customer surveys are also critical because they enable you to identify customer interactions with your products and brand, allowing you to reengineer and optimize your production and service delivery.

Customer and Sale Metrics Guide Demand Planning

Once you’ve established some metrics for customer satisfaction with products and services, you’ll be able to determine where and how to adjust the products. Additionally, such knowledge will assist you in optimizing your procurement process and product sourcing in a cost-effective and timely manner.

Consider the following scenario where you anticipate a large volume of products based on historical sales patterns. Analyzing sales patterns can assist you in planning optimal stock quantities, inventory levels, and quarters.

Demand Planning on Inventory Optimisation

The most critical aspect of supply chain management is inventory management. When one speaks of inventory management, they refer to the entire process, from the acquisition of raw materials to the sale of intermediate and finished products.

You can purchase inventory and store it optimally through proper optimization. As a result, demand planning facilitates the efficient management of supply chains. Additionally, demand planning can align high-level and high-volume business planning with demand and product forecasting to reduce inventory costs, shorten lead times, improve service levels, and boost profitability.

Effective inventory management enables a business to obtain the optimal quantity and quality of raw materials with the least disruption to future costs and time to avoid product delivery delays. One of the factors that contribute to delivery delays is a shortage of raw materials, which can occur due to poor planning. Delays in the delivery of products and services can give customers a negative impression of a business, resulting in customer attrition. Therefore, it is critical to maintain an optimal inventory level available for sale in unexpected orders.

Demand Planning in Warehousing

Pay-as-you-go is one of the best on-demand warehousing models promoted by digital payment platforms. Electronic commodity marketplaces and Airbnb exemplify on-demand warehousing. Electronic platforms enable service delivery and product distribution to expand and grow without exposing a business to risks associated with fixed costs.

As a result, demand planning in warehousing is effective in platforms such as e-commerce retailers that face high levels of uncertainty. Through on-demand warehousing, retailers can rent small sections of warehouse space across multiple marketplaces, and we can facilitate simple product and service delivery to customers.

The benefit of on-demand warehousing is that customers only pay for the space they use rather than being locked into a long-term lease. However, one of the drawbacks of this dynamic concept is that market conditions determine pricing and no one is guaranteed a specific spot in the warehouse.


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