Why Retail Companies Need Demand Planning and Forecasting?

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Serving a New Generation of Customers

In this fast-paced world, customers want instant access to products, across all channels, at all times. Retail companies therefore need to precisely forecast and manage their inventory whilst meeting customer demands in this competitive marketplace. Demand planning and forecasting determines the quantities needed to be produced, purchased and shipped. The ability to accurately forecast demand affords retailers the opportunities to plan for efficient logistics operations, control costs by leveling their production quantities and rationalizing its transportation.

The new generation of customers is highly informed and mobile, always wanting to make purchases easily and quickly. If one retailer isn’t able to satisfy their demand, they know that they have other options to switch to. In reality, the retailers bear the brunt of ineffective inventory management, where they have overstocked shelves of certain products on one side and empty shelves for some products on the other.

Consumer loyalty is dropping and it is becoming increasingly hard to predict the consumer demand. Numerous conventional forecasting approaches are proving to be ineffective as they are unable to incorporate relevant trends and factors in real time, manage mounting data volumes and feed into automated planning systems. Lack of collaboration and fragmented supply chains pose another challenge. To be genuinely demand driven, it is a must to integrate operational replenishment planning at every level of the supply chain as well as the distribution network, so as to optimize inventory and reduce logistics costs. It also includes aligning an organization’s operations with business strategy and predicting the impact of potential changes.

Thus, retail companies need an advanced demand planning approach based on real-time customer data in a multilevel supply network that in turn supports pull and push scenarios.

Integrating Demand and Supply Planning

Constantly changing customer behavior and the rising pace of business, necessitate accurate forecasting of demand to maximize sales and retain customers. In present times, as manual and disconnected planning systems are unable to deal with the changes in the market and support the required alignment within the company itself, it is important to replace them with integrated solutions that accurately forecast and align demand besides ensuring optimum stock levels all through the supply chain.

Automated allocation and replenishment strategies are central to lowering costs and increasing productivity. Collaborative supplier relationships within a sustainable and integrated supply chain are crucial for minimizing waste and reducing transport costs. And, lastly, top-level strategic plans need be linked with daily operations.

Coping with Shopper Demands and Optimizing Costs

Retail companies attain huge benefits by integrating demand planning. In fact, best-run companies achieve significant cost savings by optimized inventory as well as improved service levels and increased sales by integrating processes, systems and people in a cross-functional manner.

LTS’s Innovations

When it comes to demand planning, nobody’s better than LTS. LTS’s solutions for integrated demand planning help retailers respond rapidly to customer trends, optimize stock availability, reduce costs and are completely scalable for retail volumes. Tight integration with logistics and flexible deployment choices provide an improved overall cost of ownership.

LTS’s solutions facilitate demand planning and forecasting, resulting in:

  •  Maximized sales through greater product availability
  • Increased forecasting accuracy through advanced algorithms
  • Reduced inventory costs owing to automation and optimization across the supply chain
  • Realization of future trends and their impact on plans
  • Reduced transport and ordering costs due to optimized logistics

Technology and Database solutions from LTS enable retail companies to handle Big Data.

These solutions render the basis for carrying out integrated demand-driven planning based on transactions at store levels and SKU. LTS solutions are developed exclusively for retail companies and are intimately integrated with potent logistics execution functionalities. Analytics solutions allow advanced monitoring of all facets of supply chain planning as the analytical data is utilized to align strategic aims with operational execution.