While thriving supply chain management includes effective coordination across many business levels, traditional demand planning happens in departmental siloes, leading to inaccurate or short-sighted decisions. More so, the supply chain structure tends to be reactive rather than proactive and cannot evaluate, sense, and adapt to disruptions, thus exposing the entire business to demand volatility. Modern solutions such as AI demand forecasting, however, give supply chain management teams a holistic and integrated view of operations, which enables them to create plans based on achieving the highest value for the organization.
As demand forecasting is becoming excessively complex, a lot of supply chain management methods are no longer capable of sensing and adapting to the increased demand volatility. Demand planning software backed by artificial intelligence can surely help your business with the latest technologically upgraded actionable insights to scale effectively and make more profits.
Five ways AI technology can help your business to forecast demand accurately
AI-enabled tools have at least five essential benefits over conventional solutions. In essence, it is all about decreasing the number of manual processes and the likelihood of human error while handling complex supply chain processing and ensuring the right amount of inventory is ordered at the right time.
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Automatically update your ordering plans
As a supply chain planner, you are constantly faced with questions like What does my future sales graph look like? What should my inventory levers or product replenishment strategy look like? What kind of stock do I have ready in my inventory? What is my product delivery performance status now, and what products might get delayed due to supply chain interruptions? AI tools provide instant solutions to all these questions by dynamically simulating how the entire operations and processing should perform to ensure robust supply chain management.
This type of solution can automatically update your ordering plan while incorporating any number of supply and demand constraints. With this feature, your replenishment strategy can become more effective and always stay up to the mark.
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Effectively deal with unpredictability
The demand forecast model significantly relies on the predictability of the product lead time. The recent supply chain disturbance means that supply chain planners must deal with repeatedly increasing lead times. What used to be 20 days is now more than 45 days due to supply chain–related bottlenecks, severe weather conditions, and many other discrepancies. Such factors can greatly hamper your future inventory planning. To solve this issue, AI demand forecasting instantly accumulates historical data and provides precision-based reporting to improve the overall decision-making process and enable you to take effective action.
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Automate workflows and unify data
Supply chain planners and business leaders at medium-sized to large companies usually work with dozens of Excel spreadsheets to manage and handle data from their enterprise resource planning (ERP) systems. Operating this type of manual planning method takes weeks and often means that various teams in your business rely on outdated data. On the other hand, AI-powered demand planning software can integrate with any ERP system and all data sources to submit regular suggested purchase, transfer, and manufacturing orders to the ERP.
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Sell products without historical data
If you do your market research, you can find many solutions that provide accurate forecasting strategies for your business. Many cloud-based solutions utilize your historical data for future predictions, but what if you are launching a new product? AI-enabled forecasting solutions efficiently resolve this issue by retrieving available data from various products in similar segments. AI solutions can easily help your business run forecasts without historical data.
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Minimize overstock or understock
Losing a lucrative selling opportunity can be costly for any business. Effective demand forecasting can utilize relevant KPIs to generate accurate reporting so that you don’t run out of stock or overstock any product in your inventory. AI demand forecasting can proactively rebalance supply and demand by automatically analyzing all available data and constraints.
Consequently, these solutions give supply chain planners a critical purchasing plan ready for execution at any point in time.
Make your supply chain fail-safe with Avercast
Advanced Demand Planning Software custom developed by Avercast, A TransImpact Company, provides end-to-end technological solutions for precision-based forecasting. This brilliant solution gives our clients complete visibility into their entire supply chain management. To learn more about our products and services, talk to an expert or book a free demo.
