The Biggest Challenge with Using Demand Planning Software
The Biggest Challenge with Using Demand Planning Software
Demand planning is an incredibly important part of running a successful retail business. However, if you’ve ever tried it, you’ve seen that demand planning isn’t quickly done on spreadsheets or with simple mental math. With overwhelming inventory data and sales trends to track, it can become a mind-boggling task.
This is why many businesses have recently begun utilizing demand planning software. They use it to manage their inventory better and create an accurate demand plan that accounts for their customers’ needs. Because of this, there’s no question that this software has become a powerful asset within the retail industry.
However, if you’re looking to invest in demand planning software for your business or are currently using it, it’s important to note that it’s not a plug-and-play solution. Some challenges come with it that could render the software useless to an inexperienced merchandise planner and make a significant investment feel like a wasteful one. So to help you avoid any headaches, we’ll give you the highs and lows of demand planning software in this blog. We’ll also share why even with automated systems, you’ll still need an expert to run the software and get the best ROI (return on investment).
Demand Planning Software 101
For business owners performing demand planning manually in spreadsheets, implementing demand planning software will make you feel like you’ve stumbled upon the holy grail. Whereas you may have been manually pulling together your sales history, trend data, and seasonality to create an inventory plan, demand planning software can automatically do this for you. Ultimately, it can provide the information you need to place reorders or take action on unproductive inventory.
Demand planning software can increase sales by ensuring you have the proper inventory to fulfill orders. It can also help you avoid unnecessary spending. Without question, it can serve as a beneficial asset to your company.
But as an inventory management firm committed to transparency, we want to ensure that you know all there is to know about demand planning software. This means not just the advantages but the disadvantages as well.
Although there are a lot of benefits to demand planning software, it’s also a significant investment to make in terms of time and money. It’s not going to run itself, which means you need someone with merchandise planning expertise (also referred to as a merchandise planner or inventory planner) on the team to use the software and make recommendations.
This is especially true if you aren’t too familiar with your current software or are purchasing something new. If you’re in the market for new demand planning software, an expert planner can help you determine which platform best suits your needs. They’ll have the proper knowledge and experience to ensure you capitalize on your chosen program’s capabilities, get the data you need, and use it accurately.
The Importance of Hiring a Seasoned Merchandise Planner
At Boon, we don’t beat around the bush. We know you’re looking for results, and everything we do focuses on achieving that. That’s why we want you to know that while demand planning software is a tool that can save you time and give you incredible data to work with, without an experienced merchandise planner to run things, you most likely won’t be using it effectively.
What exactly does that mean? Let’s explore the domino effect.
One of the main roles of a merchandise planner is to reconcile the bottom-up or item-level forecasts with top-down sales and inventory forecasts by category. When planning a future season, there are often shifts and changes in your assortment that need to be accounted for in your future demand plan. This process is a blend of art and science that takes both skill and experience. Without a critical eye toward the numbers and the background knowledge of the potential impact assortment changes can have on your demand plan, you could end up overbuying some items and underbuying others.
The potential for this negative domino effect depends heavily on your merchandise planner’s actions and analysis. But you avoid this simply by putting the success of your demand planning software in the right hands.
So, before you rush into getting a demand planning software like Toolio or Netstock, ensure you have some merchandise planning expertise on your team – this can take the form of a company employee or an external support team like us here at Boon. Because while it may seem like a good idea to keep things in-house, consider what happens when you opt for a team! You’ll get deeper expertise and broader experience with many eyes on your business.
Maximize Your Investment With Boon
Investing in demand planning software is a step forward in solidifying the success of your business. The software can collect inputted data and information, making it easier for you to make confident business decisions. But it’s essential to know that simply using new or existing software won’t be your key to success.
Although demand planning software can automatically generate forecasts for you, its predictions run on inputted data that needs to strategically analyzed by an expert. So to make the most of your investment, you’ll need an experienced team of merchandise planners to run your software to its full potential. If you need help finding the right team, consider yourself lucky because you’re already in the right place!
Click here to find out how Boon can help you get the most use out of your demand planning software today!