3 Things to Know When Outsourcing Your Retail Demand Planning
3 Things to Know When Outsourcing Your Retail Demand Planning
Did you know that 37% of small businesses outsource a part of their business process? It’s true! Outsourcing or getting fractional support, has become a massive timesaver for companies looking to enhance their operations while appropriately allocating spending. Demand planning is one business process you can outsource to achieve better quality results and more efficient use of your resources.
Why? Because it leaves the heavy lifting to the experts and allows your team members to focus on their unique areas of expertise. This can help your business work like a well-oiled machine, which is especially important considering today’s competitive retail market. Businesses within the retail sector need a demand plan they can count on to anticipate sales demand and stay instock so they aren’t disappointing customers.
If you’re on the fence about outsourcing your demand planning and forecasting, read on to find out why this is one decision you don’t have to think twice about!
What To Know About Demand Planning
Whether you’re relatively new to the retail industry and demand planning and forecasting or a seasoned business owner, outsourcing this task to an expert is one of the most rewarding decisions you can make within your business. Let’s discuss the basics of demand planning and learn more about its benefits.
Demand planning is reviewing your business’s sales and inventory history and seasonality while monitoring sales trends to better predict future demand. Doing this helps ensure that you only invest in the merchandise you need to build trust and serve your customers – no more, no less.
Understanding how to implement this process is crucial. Taking the time and effort to create a thourough demand plan can help you avoid making poor business decisions that can negatively impact you in the short and long term.
But when you outsource this task, you hand the job of organizing and analyzing your historical sales data to create a forward-looking sales demand plan all over to an expert.
Getting a demand plan from an expert inventory planner can help your business attain a more accurate sales forecast and subsequently reduce supply chain expenses, increase inventory productivity, and improve the accuracy of your financial plans.
When you’re in a startup environment, team members can often wear many hats and have a wider scope of responsibility. The problem with giving inventory planning to inexperienced team members however, is that they may need help figuring out what to look for or plan for. On the other hand, expert inventory planners (like we have here at Boon) have deep industry experience and skills, plus an understanding of the complexities of many product categories and business models to get laser-focused on what’s going to drive more sales and profitability.
So although outsourcing something as crucial as your demand plan can feel risky, can be an absolute game changer in terms of having productive inventory management and earning the best return on your inventory investment (ROI).
Outsourcing Your Demand Plan
When you’re ready to outsource your retail demand planning, you shouldn’t outsource to just anyone – the right inventory planner or firm will support you in many ways. Here are three things you should know about when outsourcing the demand planning portion of your business.
1. You’ll Obtain Higher Quality Data
A qualified and dedicated inventory management planning firm will know how to identify and analyze the right historical data to provide you with high-quality demand plans to help you make better business decisions.
By looking at past sales data, expert inventory planners can examine trends that have contributed to past successes and make future projections based on expected changes within your business. When working with skilled professionals like those at Boon, you can achieve a more accurate forward-looking sales plan at all levels - from item to category and up to the total business level.
Are you looking to expand your business by adding new items or using new sales channels? Boon can analyze the historical data you have and make recommendations to account for that in your demand plan going forward.
Rolling up your demand plan from the item level will give you an important data point to use when forecasting your high-level sales and inventory numbers – this data can help support and build confidence in your broader financial plan.
2. You’ll Have Input in Creating the Inventory Plan
Inventory forecasting and demand management should be a collaborative process between all parties – you’ll feel involved and empowered to provide input along the way.
Working together, we’ll identify crucial quantitative and qualitative data we’ll need for us to create a demand plan at the item level. The data you provide, as well as the context surrounding it, will help us develop the best demand plan possible – you supply the information, and we’ll handle the rest.
And with our customized approach, you get to provide input on how you want your tools and reports to look and function — no cookie cutter reporting here, it’s all customized to your needs and preferences.
3. You’ll Need to Continuously Reforecast
The best sales forecasts and demand plans come from continuously reforecasting as more sales data becomes available – this isn’t a one-time project. The more accurate demand plans are those that are updated every week because they can quickly react to changing sales trends (some of the biggest retail companies even utilize systems that update their demand plans daily).
The biggest mistake we see new brands making with their inventory planning is not updating forecasts often enough to be proactive about reorders. Applying changes in sales trend to your demand plan early and often will give you the most accurate picture of future inventory levels — which keeps you from falling out of stock and disappointing your customers.
If you’re just getting started and sales volume is relatively low compared to your inventory levels, we can start at a slower pace. We may begin with reforecasting once a month or every other week and work up to weekly reforecasting.
Trust the Experts at Boon
There are so many moving parts to creating a successful demand plan. And if you’ve never learned how to analyze and track sales data and utilize that data to create a sales and inventory forecast, leaving it up to yourself or unqualified team members can be disastrous.
That’s why trusting the experts and outsourcing demand planning to inventory planners can be the most efficient way to reduce supply chain expenses, increase inventory productivity, and improve the accuracy of your financial plans – not to mention a great way to get ahead of the competition and keep your items instock.
However, you don’t want to leave your outsourcing needs in the wrong hands. You want a team of experts who will obtain higher quality data that you can depend on, ensure that you remain active in the demand planning process, and commit to being completely transparent along the way.
This is how you achieve productive inventory management and increase your ROI while effectively creating the business you’ve been dreaming about!
Are you looking for your dream team of experts? You’ve found us! At Boon, we’re committed to providing high-caliber inventory management planning and sales forecasting to help you achieve long-term success. Book an intro call with us to begin outsourcing your demand planning today!