What is Demand Planning Software?

what is demand planning software

Demand Planning Software definition

Demand Planning Software can be defined as a computer-based program which drives the Demand Planning process of integrating historical sales data, relevant business information and statistical analysis to automatically generate long-range estimates of expected demand. User inputs like impact of marketing promotions, new product launches and discontinuations, pricing discounts, rebates and market intelligence are also considered by the software to generate the final version of Demand Plan. 

Benefits of using Demand Management software 

Outlined below are the key benefits of using a Demand Planning software: 

  • Increased speed: The entire process of Demand Planning becomes very fast due to higher data processing speed of the software and capability to handle multiple users with simultaneous inputs. 
  • Enhanced accuracy: Historical data is securely stored and retrieved with very high data integrity. In-built systemic checks and balances for user inputs lead to increased accuracy. 
  • Higher efficiency: User input workflow is simplified, processes are standardized, and the most current data is automatically refreshed from database leading to high efficiency. 
  • Cost savings: Lesser resources are deployed for Demand Planning process and with increased accuracy and efficiency, forecast accuracy is improved leading to overall inventory reduction across the Supply Chain. 
  • Flexibility & Scalability: High degree of customization as per user requirements and capability of running what-if scenarios renders unparalleled flexibility. Software programs can easily handle higher volumes of data and are future ready for scaling businesses. 

Excel vs. Demand Planning Tools: What’s the Difference?

Excel is one of the most accessible and user-friendly productivity tools for data entry, calculations, data sorting and analysis, creating graphs and charts, budgeting and accounting, planning and scheduling, etc. However, Excel is not designed for multi-user online collaborative work and is prone to inconsistency, errors and misreporting. Excel is usually not suitable for handling large volumes of data and updating and consolidating multiple Excel files is very slow and difficult; rendering Excel unfit for supporting a quick management decision-making process.

Demand Planning is a collaborative process with simultaneous inputs from multiple functions in varied formats. It deals with large volumes of historical data, relevant business information, statistical modeling, and forecasting. Demand Planning tools are essentially software programs that enable the quick, accurate, effective and efficient execution of this Demand Planning process.

demand planning tools

Features of a Demand Planning software

  • Statistical Analysis & Forecasting: Based on the historical sales data and relevant statistical model, a baseline forecast can be generated. Cross-functional consensus forecasting combined with external economic factors and market intelligence, lead to radical improvement in the final Demand Plan released.
  • Segmentation: Huge volume of historical data can be easily sorted and segmented according to the SKU, product category, distribution region, customer, seasonality, etc. Meaningful data reporting like Pareto analysis, key drivers, marketing effectiveness, etc. can be easily extracted.
  • Collaboration: Multiple users can simultaneously input their data online, offline or remotely through their computers, excel templates or web applications. Inter-departmental communication, information sharing, and transparency greatly improves.
  • What-if Simulation: What-if scenarios can be generated by tweaking various parameters like pricing, marketing promotions, new product launches, competitor activities, market intelligence, helping business better prepare for changing market conditions.
  • Product Lifecycle Management: Impact of new product launches, product up-gradation, pricing, rebates, marketing activities, product discontinuation, etc. can be analyzed.
  • Performance Management: Real-time analysis of forecast vs. actuals, deviations in ordering patterns, exception reporting, trend reporting, potential inventory and shipment issues can be tracked.

Challenges of implementing a Demand Planning solution and how to overcome them

Implementing any new system in an existing business has its own set of challenges. Anticipating such challenges and proactively working towards the probable solutions is the key to implementation success. Outlined below are some common challenges with probable solutions.

Common Challenges

Lack of documentation of business processes 

Probable Solutions

Ensure that the pivotal contributors of Demand Planning like Sales, Marketing, Finance, etc. have their basic processes well documented and individual expertise and rules of thumb are incorporated. 

Lack of top management clarity and commitment 

Top management are the project sponsors and they need to be clear on their existing processes, desired processes and software deliverables. The implementation needs to be driven with top-down approach and proper resource allocation. 

Technical issues 

The software solution selected needs to be integrated with the existing systems including ERP systems. Pre-hand assessment of the upgrade/change required in servers, computers, networking, internet speed and bandwidth needs to be validated. 

Insufficient analysis of requirements 

The Demand Planning experts and core team members need to carry out an in-depth analysis of the existing processes, changes required in processes, new functionalities and reporting desired from the software solution and the capabilities and deliverables of the new software. 

Resistance of users to adopt new system 

This is one of the most challenging and complex issue. To mitigate this challenge, involve the users from an early stage of project, explaining the potential benefits for them and the business. Transparent communication in terms of project milestones, timelines, feedback from users and proper training is required. 

Business continuity issues during implementation phase 

Department heads need to allocate their users for business process documentation, testing, and implementation. Resources are generally stretched and constrained, hence excellent time and people management skills are desired. Certain routine activities and reporting need to be either moved-up, skipped or delayed, to dedicate more time to support the new software implementation.

demand planning infographic

View our quick visual aid on some of the key attributes of a successful demand planner.

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How to compare Demand Planning software solutions

With a plethora of choices available for Demand Planning software solutions, it’s imperative to move beyond the typical considerations like price and basic features. Outlined below are the key comparative topics to be considered before finalizing a software solution provider:

  • Compatibility with ERP system: First and foremost, the potential software solutions needs to be compatible with your existing ERP system.
  • Business expertise: Working with a software solution provider with your domain expertise and clients from a similar business is a great advantage.
  • Software demos and trials: A truly confident solution provider will quickly provide a demo of their software solution and mock trials if needed.
  • Scalability and customization: Scalability of the software to cater to future business requirements and a higher degree of customization.
  • Communication and integrity: Responsiveness, transparency in communication, a full explanation of contract terms and costs, ethical business practices and integrity are the hallmarks of great vendors.
  • Post-implementation support: Check the expertise of post-implementation support team, responsiveness and turn-around time.
  • Client ratings and recommendations: Check the ratings and recommendations by existing clients. Seek contact details of clients and don’t hesitate to contact them to get first-hand information about the vendor.

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