In today’s volatile manufacturing landscape, demand planning has never been more critical, or more complex. Midsize manufacturers and distributors are navigating a perfect storm of unpredictable customer behavior, global supply chain disruptions, shorter product life cycles and pressure to reduce working capital all while improving service levels.
Organizations are turning to demand planning as the solution to staying competitive. Yet when challenges like overstocks, stockouts or missed delivery windows arise, those same organizations often point to demand planning as the cause.
It makes sense. Demand planning touches everything from strategic promotions to procurement and supply chain planning and coordination. Bad demand planning means broad impact on business continuity and reduced efficiency.
But here’s the catch: when demand planning breaks down, the root cause is often not the planning process itself, it’s the forecast that feeds it.
When the Compass Is Off, the Whole Journey Goes Sideways
Forecasts are the starting point of the demand planning process. They guide how much raw material to order, how to schedule production and what customers can expect in terms of delivery. If that starting point is wrong, the entire process unravels.
The result? Overstocked warehouses, empty shelves, frustrated customers and a balance sheet that’s harder to explain every quarter.
If your demand planning feels chaotic, it might be time to look upstream at your forecasting process. Often there’s common forecasting errors quietly sabotaging your broader planning efforts.
Why Forecasts Go Wrong (and Take Demand Planning Down with Them)
Let’s break down the most common reasons forecasts fail:
1. Gut Feel Over Data
From sales reps to the C-suite, forecasts are often built on intuition – what the goals are for this quarter, how individuals believe a certain customer will act. While experience is valuable, gut-driven forecasts built in a vacuum can miss seasonal trends, market shifts and historical anomalies. Without data to back them up, these forecasts become wishful thinking instead of reliable planning tools.
2. Lack of Visibility
In the same vein, if teams are working in silos, using disconnected spreadsheets or outdated systems to figure out forecasts, you’re flying blind. One individual might have one perspective on potential sales while another, without access to the same information or experience, would disagree. Without a single source of truth, it’s impossible to track forecast accuracy over time, understand what was actually sold and learn from past demand patterns. This lack of visibility leads to repeated mistakes and missed opportunities.
3. The Wrong Tools
Often, the final forecast is either a mix of inputs from cross-functional groups without a single source of truth or left to one person with an antiquated spreadsheet and a best guess. Both paths are bound to fail. Forecasting requires a cross-functional system that builds in market awareness and leverages statistical modeling. Without the right tools and collaboration, even the best planner can’t see the full picture.
The Fix: Start with Better Forecasting
Before you overhaul your demand planning process to fix your latest challenge, ask yourself:
- Are our forecasts grounded in data?
- Do we have visibility into past performance and future trends?
- Are we collaborating across teams to build a shared and accurate view of demand?
If the answer is “no” to any of these, your demand planning strategy isn’t broken, your forecasting is.
Adroit gives midsize manufacturers the tools to build accurate, data-driven forecasts that power smarter demand planning (without breaking the bank). With a single source of truth, cross-functional visibility and AI-enhanced modeling, you can stop reacting to chaos and start planning with confidence.
Ready to see how better forecasting can transform your operations?