Demand planning, according to Tech Target, is the process of forecasting the demand for a product or service so that it can be produced or delivered more efficiently and to the satisfaction of customers. In this blog, we take a look at why effective demand planning is fundamental to business success, and how Bevica can help alcoholic drinks businesses achieve this.

Why is effective demand planning so crucial in the drinks industry?

There are a number of reasons why alcoholic drinks businesses need to have effective demand planning processes in place.

1. Seasonality

Demand for alcoholic beverages often fluctuates seasonally, with spikes during key holidays (such as Christmas) and special occasions (for example, key sporting competitions). Effective demand planning helps these businesses to anticipate fluctuations and adjust stock accordingly.

2. Inventory management

Certain alcoholic drinks have a limited shelf life, and improper inventory management can lead to spoilage or wastage. Demand planning helps optimise inventory levels to minimise waste while ensuring products are available to meet customer demand.

3. Forecasting

Accurate demand forecasting enables producers to plan raw material procurement, production schedules, and distribution channels effectively. It also helps wholesalers and retailers to plan stock procurement, sales, and distribution. All this helps avoid stockouts or excess inventory, which can both have negative financial impacts.

4. Product innovation

Understanding consumer preferences and trends through demand planning can guide product development and innovation efforts. This ensures that new product offerings align with market demands and have a higher chance of success.

5. Marketing and promotion

Demand planning insights can inform marketing and promotional strategies, such as pricing, packaging, and advertising campaigns. By understanding demand patterns, companies can allocate resources more effectively to maximise sales and profitability.

6. Supply chain efficiency

Demand planning is essential for optimising the entire supply chain, from sourcing raw materials to delivering finished products to customers. It helps minimise transportation costs, reduce lead times, and improve overall efficiency.

7. Risk management

By identifying potential demand fluctuations and market risks in advance, companies can develop contingency plans to mitigate these risks. This includes strategies for managing inventory levels, diversifying product offerings, and adjusting production capacity.

What is the role of a business management system in effective demand planning?

A business management solution, such as Bevica, plays an important role in the demand planning process. It is the central repository of all the business data from every department, from finance to sales, operations to the warehouse and, therefore, it is the single source of truth for the business. As a result, all departments will be able to access it for the same, up to date and accurate information, which can then be used to make important business decisions, including those related to demand planning.

How can Bevica enable effective demand planning?

As part of its robust suite of features, Bevica includes supply planning functionality. This functionality uses account forward sales orders, committed purchases and call-off stock, as well as inventory reordering parameters. This in turn will suggest specific actions users can take concerning replenishment from vendors, transfers between warehouses, or production. Inventory reordering parameters the system uses include: current forecasts and budgets, lead times for logistics, production, and warehouse handling, plus minimum and maximum replenishment parameters.

In addition to Bevica’s built-in demand planning capabilities, the solution also integrates seamlessly with third-party demand planning software solutions such as AGR inventory and Lanhams.

AGR Inventory extracts all necessary data from the customer’s ERP system and uses it to create smart forecasts by product, channel, customer, and location.

Lanham’s Demand Planning solution offers a unique dynamic replenishment method. This monitors usage once the forecast is established. And then continually adjusts for events, including unusual spikes in usage and over-consuming a forecast.

Find out how Bevica can help your business

Bevica is the business management (ERP) software solution specially created for the alcoholic drinks industry. With best practice tools and features to manage all areas and functions of your business, you can immediately have an overview of your business from a single platform.

To find out more about Bevica and how it could help modernise and improve your business processes and productivity, book a demo with one of our expert team today.