Your supply chain is dependent on many different factors and planning for both demand and supply is important to keep the right balance between running out of products to sell and having no room to store surplus inventory. Many companies only focus on supply planning but keeping tabs on the demand side is important as well. With the right tips and tricks, you can improve how your supply chain functions and meets the needs of your customers.
Demand vs Supply Planning
Supply and demand planning are two related but different approaches to inventory management. When your planning focuses on the supply side, you are watching the inventory levels and ordering new products when the supply gets low. The demand side of inventory management focuses on forecasting the levels you will need to meet customer needs and anticipate sales. Both types of planning are needed for a smooth supply chain flow. You can find software to help you track inventory and forecast demand, helping your planning strategies come together easier.
Aspects of Planning Demand
There are many different aspects to inventory management besides planning the supply and demand sides of the equation such as managing the product portfolio, trade promotion, and statistical forecasts. Not only do these relate to how much of a given product you need to have on hand during different times, but the way that a new product or improvement is received by customers can have an impact on how the rest of your items sell. For instance, offering new colors for one line of phone cases may reduce the sales in another line that does not feature those colors.
Plan Implementation
Implementing your inventory plan means incorporating the process into an overall sales and operations plan. Supply and demand inventory planning is part of sales and operations and the processes need to flow smoothly into each other for the best results. If you just go on the raw data, then you will miss the mark with your planning and orders. Collaboration between analysis and over-arching knowledge and experience in sales will help you visualize the big picture and pinpoint your needs. This means that involving the whole team in finalizing the plans, as well as in the data gathering and analysis, will help you strike the balance you need for inventory management.
When you accurately manage your inventory, it lets orders and products flow through your supply chain without gaps or overflow. Using both demand and supply planning for your inventory management processes can help you more accurately forecast sales numbers, build marketing campaigns and keep your shelves stocked properly.