The Internet of Things Is Bound To Make An Impact in Your Demand Forecasting

There’s a lot of buzz surrounding the Internet of Things (IoT). With Nest Labs’ line of household connected devices and Amazon’s new Dash Button for reordering groceries, customers are getting used to more and more connectedness in their day-to-day lives. Retailers too are trying out ways to be not only more connected to customers but also to connect disparate parts of their business operations by adding connectivity to everyday things. RFID chips in packaging can track inventory from source to customer and provide all kinds of valuable data, as well as lower shrinkage. Digital signage and shelf tags saves labor and reduces pricing errors. With all the new and exciting things that the Internet of Things can bring to retail, it’s shocking how behind the times most inventory planning and replenishment software is.

Most Demand Forecasting Software is Not Ready

Truth is, the most popular demand planning systems are woefully behind the times. Their base code was written when the internet was still in its infancy and a connected home was still only in sci-fi movies. Service contracts are still set up on old models that only allow customers significant upgrades every 3-5 years (or later, depending on what you can afford). Even if they wanted to update faster, the system code and the business model make it impossible. So if you bought your demand system back in the day, you’ve maybe only had 5 or 6 updates. If you installed the system last week, you are still using methodologies and mindsets from the 90s, even if it’s wrapped up in the latest, prettiest packaging. Not to mention that next year, you’ll be wishing for an update that is still 2 years out. How are these old-school dinosaurs going to keep up with the demands of modern Omni-channel retailing and a more connected consumer? They can’t.

Disrupt the Old Demand Forecasting Software Model

So what are the features that demand forecasting and planning systems need to integrate with the Internet of Things and be successful in the future?

- Spot the market trend faster – With new connected technology comes new data points. The perfect demand forecasting system will use this new data to drive faster and more accurate forecasting. It will see the next iPad coming from a mile away and get you ahead of the competition.
- Turn on a dime – In order to make use of all this new data, the demand forecasting and planning system will need to be flexible enough to accept updates and code changes anytime. Don’t get stuck waiting 3 years for an update just so you can use data you already have.
- Lead time forecasting— With RFID chips attached to product and packaging, retailers gain valuable insight into their supply chain lead times. Lead times drive a big part of the order calculation for any demand forecasting or replenishment system. But surprisingly, most demand forecasting systems relegate lead times to one or two manual entry fields that are only updated when someone gets around to it. Retailers need a system that can take all this new lead time information and drive automatic cost savings thru lead time forecasting.
- Cut thru the crap – The problem with a lot of current retail processes is that they rely on a person to go find the needle in the haystack. If you want to be nimble and innovative, you need to be less in the weeds. A demand forecasting and replenishment system that makes it fast and easy to find exceptions will be the system that frees you up to do more important work.

Available anytime, anywhere – Cloud-based computing is gaining traction everywhere but most demand forecasting systems are still stuck on the old enterprise model. In order to stay competitive, retailers need systems that give them 24/7 access from anywhere. Think about how handy it would be to have all your info literally in the palm of your hand while you are at a trade show or at market. Or to be able to deal with a forecasting problem from the airport. Or to get an alert on Black Friday when you exceed your forecast.

Sick of being stuck in the Stone Age with your demand forecasting and supply chain systems? Contact us today to set up a demo of iKIS™, our demand forecasting and supply chain solution. As a true SaaS (Software as a Service) retail planning system, iKIS™ provides all the best features of the old enterprise systems, and all the adaptability and disruptive technology that modern retailers demand. Learn More

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Stuart D

Stuart Dunkin is a strategic visionary who leads by calling on his broad range of experience as a former retail executive as well as a consultant for top retailers and for the E3/JDA software company. He founded Data Profits to solve a real-world problem plaguing retailers today – the disjointed relationship between supply chain data, people and business goals. He has experienced first-hand the challenges and frustrations that occur when decisions are made based on wrong data, which often leads to the wrong actions being taken with crippling results like overstock, out-of-stock, and increased working capital.
Stuart graduated from Auburn University, with bachelor of science in business administration.