While digital technology is changing how consumers do business, demand planning is still dependent on established tools.
An article on the Forbes website discusses how prevalent technology has become in the lives of millennials, focusing on the fact that social media pervades their day-to-day activities. Millennials “are driving demand and changing the game for businesses today,” the article explains.
The massive amounts of data being produced can show how your customers feel about your company and products in real time. Businesses should try to tap every possible source to get as much information as possible from inside and outside the company. The goal is to get a full picture of what’s happening and plan accordingly.
In order to do that, companies need to look at all social and sentiment analysis about their customers and products as well as the relevant market dynamics, the Forbes article explains.
While this is the age of the always-on millennial, which requires supply chains to listen in real time to social conversations, it’s not clear whether social trends and sentiment analysis can be translated into the data points needed for demand planning. The data is indeed relevant and important, but a new breed of application is necessary to translate social demand into demand planning.
Although social does matter for midmarket retailers and distributors, additional factors must be taken into account when doing demand planning. That means you still need to use traditional ERP tools such as demand forecasting.
In addition, as organizations continue to gather social data, they need to consider how reliable this data is. In other words, if you analyzed what the social forecast predicted versus actual sales in the forecasted period, how accurate was it? Currently there’s likely not enough history to perform the analysis. However this continues to change as social analytics tools continue to gather and analyze big data. Since this is so new, it’s probably best to look at it from the perspective of, if you had used the data, how accurate would it have been in hindsight?
So while distributors do need to monitor social media, at the end of the day, demand planning today still requires the standard tools of the trade. However, be on the lookout for a new breed of applications that will leverage social analytics as one more demand source to be used in the company’s demand forecast.
Source: Forbes, September 2013