Inventory & Demand Planning

What is demand planning process?

Demand planning as a process is taking data from multiple sources like sales or order history, current back-ordered stock, future promotions, external channel demand, etc. Then using said information to try and predict what inventory demand would be in the future.
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While it’s not a perfect science and sometimes unexpected events can throw a wrench in your forecast. Typically the more data points you can feed your model the more accurate it will be over time.

Advanced order management and warehouse management systems like Shipedge store many of these data points and could even integrate with external data sources to improve the forecasting process.

What is the difference between demand planning and forecasting?

Demand forecasting is the process of trying to get an accurate picture of future demand for a product.

Demand planning is the use of your demand forecast to try and plan inventory in terms of purchasing, inventory allocation by channel, reserve stock, and other inventory impacting considerations.

What are the elements of demand planning?

There are several elements that can influence your demand planning model and typically the more relevant data points you are able to feed into the model the more accurate it becomes.
- Product usage or sell-through rate.
- Expected spikes in demand.
- External trends and factors.