Common Demand Driven Issues: Which Do You Fix First?

Revolutionize Your Demand Driven Business

Running an efficient business is vitally important in today’s business climate. With so many variables, though, that can be an extremely daunting task to accomplish, and many ‘solutions’ are ineffective or provide minimal impact, taking years to pay for themselves. Demand Driven is a concept people think they have mastered when in reality it is the link in their chain that needs immediate attention. Let’s take a look at a few of the areas that should get special attention to make sure your business is Demand Driven.

Demand Forecasting The Critical Piece to Success

One of the standard methods for achieving in-house forecasting is comparing sales from previous dates to today’s sales. The problem with this approach, though, is that there are a lot of specifics that go into how inventory moves on any given day, and those aren’t tied to a specific date but rather to industry buzz, price differences, and more. A quality demand forecasting solution takes those into account and makes things much more efficient. The reality is many (most) legacy forecasting software solutions only run a few forecasting algorithms due to hardware constraints when the software was written. Your business needs more than 2 or 3 forecast algorithms, you need forecasting algorithms for slow and intermittent demand and also algorithms for promotion and other market events. In addition to several forecasting algorithms, you need a focus on demand for all demand types: regular, promotion, event, and closeout.

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Lead Time Forecasting

Demand forecasting is just the tip of the iceberg, though. If it’s telling you that you need a ton of additional units, you need to be able to know when the right time to make a purchase order from the supplier is. Managing that on a large scale can be difficult, often coming down to looking into files to see how quickly they have fulfilled in the past, and assuming what you find is standard for them. Using forecasting you can have a program do that for you, minimizing the headache that this aspect can sometimes cause, and making you more able to stock the right amount of products so you don’t run out of stock. Lead Time forecasting is critical to getting your inventory to arrive just in time.

Inventory Optimization

No one wants to have inventory sitting on the warehouse or stockroom floor, and while it’s hyped a lot, selling out of product means turning away customers who would otherwise have made a purchase. By optimizing your inventory, you can make your inventory more efficient, saving you time and maximizing your bottom line.

Order Management

There is a good reason why logistics is a multi-billion dollar industry. It’s extremely complicated! Knowing when to order, how much to order, and even what exactly should be ordered can be streamlined with accurate order management. By looking at information from forecasting, it’s possible to simplify that process, and even automate it so that you can avoid much of the human error factor that can take a bite out of your bottom line.

Inventory Replenishment

Being able to know how much to order is quite important, but through integration of demand driven solutions into your supply chain, you can take those numbers and translate them into action by having your system automatically send in orders to suppliers. This eliminates the headache that reordering can cause, and lets your business focus its efforts less on logistics, and more on what you do best: fulfill the customers’ needs.

Seasonal and Market Trends

Examining market trends can seem like a science or chaos, and either way has a tendency to be confusing and extremely difficult to understand. However, the data it provides can allow you to make adjustments to how your inventory flows, making sure that you don’t run out of stock or wind-up with overstock due to the ebb and flow of the market.
Seasonal flow is also an important aspect that can be tricky, especially if your business relies on a specific demographic. While this area is where date comparison forecasting has the highest chance of success, there are still variables that it can’t take into account, but a dedicated and proven system can.


Figuring out how a promotion is going to affect inventory can be like trying to guess how a fire is going to act in a forest. To those who aren’t extremely familiar, either of them can leave the observer simply guessing. However, fires have a very specific science behind them, and promotional inventory management does as well. By doing things like comparing customer sales of the promoted item at different prices, being able to accurately predict what kind of inventory you need to make the most out of a promotion is certainly possible.

Common Issues with Great Opportunities

These and more can be done through Data Profits demand driven optimization systems. To find out how being demand driven can benefit your business and lead to a more efficient and profitable future, Contact Us.

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