ECommerce sellers and product manufacturers use many kinds of software to keep their doors open and orders flowing. One core software category contains the forecasting systems for production and inventory control. These functions are present in different packages, but generally, “demand planning and forecasting” software will contain all the necessary features for you to forecast production and inventory needs.
So, what kinds of forecasting systems for production and inventory control should you consider, and what features are available?
Defining forecasting and planning tools
Demand planning and forecasting tools help you track trends that impact future demand for your products. And, that general insight is the same if you’re manufacturing a product or selling a product to end-consumers.
Forecasting solutions require a significant amount of data to help you plan based on realistic trends. So, when considering a solution, you want capabilities that clean data to eliminate errors. This is often referred to as governance of a database. Even better, high-quality solutions that place a premium on governance tend to be faster and support more real-time capabilities.
Once you start looking at options, focus on features to create a shortlist. Prioritize predictive capabilities because you want to rely on existing inventory and management tools for ongoing operations like setting replenishment levels. While forecasting systems should integrate with inventory management software, you want to have clear distinctions between those items.
7 standard features for forecasting systems for production and inventory control
1. Historical analysis
Your core functionalities for these forecasting systems include looking at historical data and predicting what will happen next if those trends hold true. Advanced tools will look at multiple aspects of your operations to try and make predictions. To help, they’re pairing the demand for an individual product or set of related SKUs with analysis of broader economic trends.
You may need to set up this framework or provide additional datasets for your software to understand macro and micro trends. The ongoing pandemic has shown that many companies need to regularly run these types of analyses and update modeling information to reflect the best data available.
Accuracy here can help you plan accurately and optimize inventory management. Insufficient data or improper analysis can lead to purchasing decisions and stock levels that harm your business.
2. Demand-shaping and marketing support
An aspect of these forecasting systems is the ability to adjust expected characteristics to change an outcome. One of the most significant tools here is demand shaping, where your company will try to increase the demand for a product. You do this through marketing efforts, price incentives, add-ons, replacements, and other efforts. From an inventory control side of things, demand shaping can be performed to help the demand of a product meet the inventory you expect to have on hand.
You’ll want analytics platforms to take these tactics into account and adjust forecasts accordingly. Say you know that you can only have 10,000 of a specific SKU during the holiday season, for example. Why not tweak the pricing model until you find the highest value you can set to sell all 10,000 units? Or test to see how high the price can go before projected revenues decline.
3. Seasonal forecasts
Here’s a key requirement for forecasting systems for production and inventory control: it needs to be able to make recommendations using specific or limited data sets. One term you’ll hear for this functionality is “data separation.”
You want to know your software can look at a broad range of information, cut out a narrow slice, and use that for demand analysis. Data separation is often used to help create seasonal forecasts for product categories. Advanced options can also help you look at slices related to specific customer groups or other market information.
Intelligent seasonal forecasts will include data from the time right before and after your season, too. That way, you get support for when to start increasing your stock and what level you want to shrink to as the season closes.
4. New market or SKU forecasts
Just like seasonal forecasts, demanding planning tools should help you prepare for new products and markets. These will rely on more of your overall historical data and the ability to create similar audiences or mirror existing products. Forecasts for new products can be very complex and may require you to build out a larger dataset for greater accuracy.
Look for tools that make it clear what’s needed and define their limitations. Ask vendors how you can best train these models ahead of time. You want a clear picture of those needs before you give this tool a try.
5. Inventory planning
Forecasting systems for production and inventory control give you plans for your inventory and operations. Generally, that means answering a wide range of “what-if” scenarios. The most common is understanding inventory needs relative to “What if things stay on the same track?” From there, you may ask what if sales increase, consumer habits change, the market tanks, and much more.
Companies need to understand what’s possible. So, these solutions are designed to help you understand how to plan for multiple scenarios and situations. Your team will need to try to assess what’s most likely and what you need to prepare for happening.
Running multiple variations can help identify patterns and trends that shape more significant inventory planning decisions. Look for adjustments large and small and see what you can identify outside of inventory. Something as simple as adding regional carriers can help you avoid supply chain and inventory bottlenecks at crucial moments.
6. Inventory, order, and accounting integration
Your forecasting tools need a lot of business data. You want to choose a solution that’s easy to feed so that you’re not stuck manually inputting information and wasting hours of your life. Automation and integration capabilities make this easy with nearly all cloud systems.
What you want most out of this integration is the ability to sync with your existing software. A new tool shouldn’t make you replace other systems. That said, it’s always good to verify that you have a backup option. For financial or accounting data, for example, you’ll likely want features that support tools like QuickBooks and Amazon Seller Central as well as standard ERPs and a .CSV data upload tool so you can upload spreadsheet documents.
7. Post-game analysis
Today’s best software gives you a chance to understand how well it performed and where you might want to adjust for next time. This post-game analysis capability looks at demand forecasts and inventory predictions for a specific timeframe and then compares your actual sales and inventory needs during that period. You see what worked and what missed the mark.
One reason it’s crucial to get this analysis within your forecasting tool is that you get better comparisons. It isn’t always easy to see why a tool made a specific recommendation, especially when considering dozens of customers and global supply chain factors. However, post-game analysis can highlight when the reasons behind a forecast don’t match reality.
You get help understanding if consumer demand was down in an area or if pricing was too high. It may uncover that supply chain delays took days longer than expected so that you experienced a stockout. Automated post-game analysis makes these comparisons for you, keeping the system honest while not bogging you down in hours of comparison work.
Learn more about different types of demand forecast modeling here
Some leading forecasting systems for production and inventory control
We’re not demand forecasting software experts, so we combed through different comparison sites, user reviews, and software roundups to highlight just a few options for eCommerce companies looking to control and forecast their inventory.
Here are some of the more positively reviewed options, presented in alphabetical order:
- Blue Yonder: A logistics and planning suite that helps businesses tie forecasts to customer service levels and risk management. It’s a more in-depth platform but has features targeted for new markets and product launches.
- ForecastRx: A solution tailored for businesses using QuickBooks and Amazon Seller Central, with easy integrations and analytics.
- FutureMargin: A newer tool focused on eCommerce and retail that aims to simplify current inventory management and bolster it with forecasting tools designed to avoid stockouts and improve replenishment spending.
- Kinaxis: The company’s RapidResonse platform focuses on concurrent planning to maintain real-time data and analytics, helping businesses react quickly. Users say it performs well even if you have a broad range of existing services, software, and datasets.
- SAP Integrated Business Planning: A large business continuity suite that has supply chain planning tools. It’s a good fit for anyone working within the SAP ecosystem.
- Streamline: An option that is easy to adopt if you’re currently using Excel and has reliable AI models for forecasting demand.
- Vanguard Predictive Planning: A robust tool for supply chain and demand planning that its users say aims at growing companies and new enterprises.
Find your experts
Red Stag Fulfillment is the expert for getting your orders to customers on time and accurately. We work with clients like you to support their data needs and keep inventories accurate. So, that makes it easier for you to use your preferred forecasting systems for production and inventory control. You plan, and we execute so that your customers, and your business, win.
