Here’s How Demand Planning Software Contributes to Managing KPIs

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How Demand Planning KPIs Shape Your Supply
Chain Management
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Overview

• What is one thing that you need while navigating
  on the unknown roads of suburbs? A MAP or a GPS
  to lead you to your destination. Similarly, KPIs
  are the guide for your Demand Planning. The
  better the KPIs, the more accurate your demand
  planning will be. Apart from using advanced
  Demand Planning Software, these KPIs can work
  wonders for you. 
• KPIs are more like modern-day GPS apps, which
  give you accurate destination distance, the time
  it will take you to reach there, any traffic in
  between, and so on. KPIs work the same way for
  demand planning, it guides you through the market
  dynamics, and each box ticked is like reaching a
  small milestone. Now you know the significance of
  KPIs, read on to learn what these KPIs are 

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Vital Demand Planning KPIs 

• Accuracy of the forecast
• The demand forecast is the primary operation. It
  is where the whole process begins hence
  it becomes critical to have the utmost accuracy.
  Putting this in your KPIs means you are
  comparing your forecast with the actual
  performance, which increases the chance of better
  performance. The better your predictions, the
  greater the probability of improved
  profitability.
• Mean Forecasting Error or Bias
• The tendency of forecasting error persisting in
  one direction is called Bias. The earlier you
  track down Bias, the finer it is for your
  forecast. Once you identify the error, tweak your
  forecast by eliminating the Bias and improving
  the effectiveness and accuracy of the estimates.
  Bias is considered an effective way of
  checking whether or not your forecast is working
  in the manner you want it to.

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Vital Demand Planning KPIs 

• Tracking Signal 
• If there is a sudden change in demand, tracking
  signals can identify them and help planners react
  accordingly. Also known as TS, it assists demand
  planners in determining when an error in the
  forecast is distributed. 
• Forecasted Sales vs. Actual Sales 
• The most important KPI that tells how your
  forecast has performed over time. Most businesses
  use this as a metric to determine the accuracy of
  their projections. Besides describing the
  performance of your prediction, it also tells
  what could have been better so that you can work
  on rectifying it. It also enhances
  decision-making and supports planners in making
  the right decision when an error occurs. 

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Conclusion

• These KPIs are just a few of many more, and
  every business has a separate set of KPIs that
  enables growth. A manufacturing business can have
  different KPIs than a retail business likewise,
  there are many examples. The purpose of this blog
  is to highlight not relying just on forecasting
  accuracy to identify your demand planning
  performance. 
• However, remember, whatever your business is,
  Avercast's demand planning software is always
  there to assist you. Besides accurate forecasts,
  it helps you plan your resources, track inventory
  in real-time, and save more by reducing inventory
  expenses and whatnot.

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