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 more connected to customers and connect disparate parts of their business operations by adding connectivity to everyday things. RFID chips in packaging can track inventory from source to customer, provide valuable data, and lower shrinkage. Digital signage and shelf tags save labor and reduce pricing errors. With all the new and exciting things that the Internet of Things can bring to retail, it’s shocking how most inventory planning and replenishment software is behind the times.

Most Demand Forecasting Software is Not Ready

The reality is that the most popular demand planning systems are still catching up with the times. Their foundation was laid when the internet was still in its infancy, and a connected home was merely a concept in sci-fi movies. Service contracts are still structured around outdated models that only allow for significant upgrades every 3-5 years (or later, depending on your budget). Even if they desired to update more frequently, the system code and the business model make it an insurmountable task. So, if you purchased your demand system a few years ago, you’ve only experienced 5 or 6 updates. If you installed the system recently, you’re still using methodologies and mindsets from the 90s, even if it’s packaged in the latest, most attractive wrapping. You’ll also be waiting for an update that is still two years away next year. These outdated systems are not equipped to handle the demands of modern Omni-channel retailing and a more connected consumer. They are a bottleneck in the supply chain, hindering retailers from fully capitalizing on the potential of the Internet of Things.

Disrupt the Old Demand Forecasting Software Model

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

- Spot the market trend faster —New connected technology brings 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—To use all this new data, the demand forecasting and planning system must be flexible enough to accept updates and code changes anytime. Don’t get stuck waiting three years for an update so that you can use data you already have.
- Lead time forecasting— With RFID chips attached to products and packaging, retailers gain valuable insight into their supply chain lead times. Lead times play a big part in 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 to take all this new lead time information and drive automatic cost savings through lead time forecasting.
- Cut thru the crap – The problem with a lot of current retail processes is that they rely on a person to find the needle in the haystack. To be agile and innovative, you must 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 meaningful work.

The Future of Retail is Here

Cloud-based computing is gaining momentum across industries, but most demand forecasting systems are still clinging to the old enterprise model. Retailers need systems that provide them with 24/7 access from anywhere to stay competitive. Imagine having all your information at your fingertips while you’re at a trade show or market. Or being able to address a forecasting issue from the airport. Or receiving an alert on Black Friday when you exceed your forecast. The future of retail planning is here, and it’s time to seize it with iKIS™.Are you tired of being left behind with your demand forecasting and supply chain systems? It’s time to step into the future with iKIS™, our innovative demand forecasting and supply chain solution. As a true SaaS (Software as a Service) retail planning system, iKIS™ combines the best features of traditional enterprise systems with the adaptability and disruptive technology that modern retailers demand. It’s time to embrace the future of retail planning. Contact us today to set up a demo of iKIS™ and witness how it can revolutionize your business. 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.