Many industries are facing inventory loss due to the COVID-19 pandemic. Fluctuating sales can cause revenue loss to businesses. To avoid all these problems, companies need forecasting methods in order to plan their operations well. How to forecast sales? Companies can use forecasting software that displays how their sales will perform in the future. By forecasting sales, businesses can get an idea of future revenue required to fulfil consumer demand.
Forecasting software is a data-driven software used to make future projections of sales using historical data and other factors such as future trends, seasonality, economic conditions, and political views that affect the demand. Forecasting eliminates guesswork and delivers results based on real-time data.
It is essential to plan all the processes by forecasting needs to avoid inventory loss. Inventory planning plays a vital role in supply chain management. Without inventory planning, companies might face stockouts and overstock situations.
What is inventory planning?
Inventory planning is the process of forecasting demand and determining how much inventory is needed to fulfil consumer demand. Using inventory planning software, companies can manage orders, accounts, and warehouse operations.
By forecasting inventory, every team has a target to achieve. It motivates the employees to perform better. If the forecasts meet the sales quota, the managers can invest more in marketing, installing new technologies, and hiring new resources to increase sales. On the contrary, managers can motivate the under-performing teams to achieve the expected targets if the forecasts don’t meet the sales quota. Forecasting sales brings a sense of accountability in teams to work towards achieving targets.
Benefits of inventory planning software
Inventory management software is a vital part of supply chain management. Benefits of inventory planning software include:
• Avoid stockouts: There are market situations where product demand may increase due to various reasons, such as a particular season or trend. If companies don’t predict the increase in sales, they might miss out on sales and revenue due to a shortage of products. There are chances that they may lose their dedicated customers to their competitors. It is necessary to make forecasts in order to meet market needs.
• Avoid overstocks – A product may sell more in a particular season and not perform well in the other season. The sales don’t remain uniform during the entire year and can observe fluctuations due to seasonality. So, it is essential to identify when the products might not perform well so that you invest your revenue wisely. If you produce more than required, it leads to overstocks and warehousing cost increases. Sometimes the products might also get damaged due to storage for a longer time. All these situations cause huge revenue losses. To avoid this, it is important to produce only the required quantity. Inventory planning software helps to identify future demand and enables you to make informed decisions. If sales are forecasted, you can plan your operations accurately.
• Increase profitability – Inventory forecasting software makes future sales projections so that you can make better sales and operations decisions. If the forecasts meet the sales quota, companies can implement advanced technology, marketing activities, and hiring resources to increase profitability.
• Reduce guesswork – Inventory forecasting software is a data-driven software that eliminates guesswork. You have proven facts to support your decisions. Using inventory management software, you can plan your every move efficiently.
• Reduce storage costs – If the companies produce more than what is required in the market, it increases storage costs. Inventory planning software avoids the risk of producing more than the requirements and thus prevents revenue loss.
• Deliver stocks to appropriate locations – Using inventory management software, companies can identify what is required by the customers at which location so that you can deliver the products at the right time right place. For example, the forecasts show an increase in the demand for chocolates in Denver for the upcoming months. At the same time, it is forecasted that there’s a decrease in demand in Chicago during that time. You can make provisions to supply the excess chocolates from Chicago to Denver to fulfil consumer orders.
Inventory planning software in eCommerce
Almost all industries are using forecasting software to increase their profitability. Inventory planning software is majorly used by eCommerce businesses to balance their supply and demand. eCommerce companies have to deal with a huge number of products daily. It is impossible to record the orders for each product manually. Inventory planning software makes your task easier. With inventory forecasting software, companies can make projections of how many orders are required to meet market requirements at each location. So, companies can plan their supply chain activities accordingly.
Inventory management software records how many orders are completed daily and how much inventory is left in hand. Inventory forecasting software uses previous sales data to make projections of future sales.
Besides eCommerce, inventory planning software is used in many other sectors such as food, automobile, electronics, and many more. Inventory management software is a popular choice for industries to make accurate forecasts and manage their inventory.
If your company is looking for a solution to manage sales fluctuations, inventory management software is the best option. Inventory forecasting software makes product management easier and helps make informed decisions to achieve sales goals.
Get ready to face any market situation in the future! Your business needs to sustain sales fluctuations even during difficult times. Therefore, inventory management software is a must! Using inventory planning software, companies can make accurate business plans to meet market needs.