The greatest challenge to achieving superior inventory control and maximizing the return on inventory investing investment lies in developing accurate forecasts. Over the years, some companies have been able to stay on track with effective demand planning.
Demand planning is the sales plan from which inventory planning, purchase planning, and restocking plans are built. All of the above is close to impossible to achieve without a detailed forecast of what will be sold, how much will be sold, when it will be sold, the delivery channels and who the ultimates customers will be. As important as this is, some organizations still refuse to pay attention to inventory and let it run as if it's on autopilot. Of course, adopting such a method would only result in being out of stocks or overstocking as demand changes.
In today's dynamically changing business environment, it is essential for organizations to adopt any means available to improve the process of demand planning. Artificial Intelligence is a great means of ensuring the maximum accuracy in Demand Planning.
In addition to the creation of the perfect balance between market demand and supply, the use of AI in the process of demand planning, Artificial Intelligence is a great means of ensuring the maximum accuracy in Demand Planning.
Artificial Intelligence helps in accurate revenue forecasting by correctly analyzing the market demand and forecast results based on that. Without proper information and intelligence to process that information, organizations resort the demand of customers. As such, it becomes a problem to obtain favorable results. Artificial Intelligence is able to handle data perfectly, and then forecast them accordingly.
When there is a huge demand in the market, a business can lose out on the opportunity of fulfilling it on its own if it's not prepared with the right inventory. By knowing about the possible future rise or fall in the demand for a product, they can align the inventory levels to make sure that they reap the benefits and their customers are satisfied.
If there is low demand for a product, a company may or may not decide to carry on with it. However, if it is bound to bring bigger profit margins despite low sales, it is worth investing time and money in. With the help of Artificial Intelligence in Demand Planning, businesses can find out how to enhance the profitability of a product.
It is important to keep an eye on the market during the production and marketing lifecycle of a product. And the simple reason behind it is the need to re-plan or alter strategies to get maximum attention and beat the competition. By looking at the changes, amendments can be made to the approach as well as the strategy to meet business goals. Not only does superior inventory management begin with accurate demand planning and forecasting, but making the commitment to developing accurate forecasts, continually updating them, and measuring their accuracy against actual sales also offers independent retailers the greatest opportunities today to maximize their return on inventory investment.