One of the greatest challenges for manufacturers is the difficulty of anticipating demand for new products. New products represent 27% of sales across all industries, meaning that companies need to understand how these items will perform.
Overestimating demand leads to wasted inventory space and can eventually force you to discount new items simply to make room for other sellers. Underestimating new product demand, in contrast, could cause you to scramble to restock or cause your customers to look elsewhere while you are sold out.
Forecasting with an Enterprise Resource Planning (ERP) solution can help to predict demand for new products and allow your business to function optimally.
Your ERP Must Forecast
If you’re not forecasting customer demand for new products, then your business will spend more to achieve the same results as your competitors. Unfortunately, not all ERPs offer capacity planning. Many ERPs, especially legacy ERPs, make their data inaccessible, so it’s not possible to forecast into the future based on historical or current data for similar products. When choosing an ERP, you will want to find a modern, industry-based system with the right functionality for your specific business needs. As nonbiased ERP experts with 25 years of software experience, Datix can offer guidance on finding the right ERP to provide an individualized solution for your organizational requirements. With our business-first approach, we take the time to understand your organization so that you can gain a system that is best suited to forecasting and offer you the other functionalities you need.
Forecasting to Anticipate New Product Demand
New products are trickier to forecast because they have never been on the market, and you don’t know how customers will receive them. Even so, it is possible to use forecasting for new items accurately with the right ERP. Here are a few factors to consider when forecasting for new products that have never been released before:
- Trend projection. Market trends vary by industry, season, and what’s recently gone viral. Looking at recent data can give you a sense of what may happen and is most accurate for the immediate future.
- Quantitative analysis. This method focuses on mathematical forecasting models based on historical past data of similar products. The more data you have at your disposal, the better.
- Qualitative analysis. In contrast to the quantitative approach, qualitative analysis factors in the impressions of customers and sales teams. It can be completed using customer and sales team surveys.
No matter what method(s) you use to forecast, you need an ERP that can support the process. As a one-stop shop, Datix gives our clients the tools they need to succeed with their software. Whether it is a tool like forecasting or the need for a systems addition like hosting or disaster recovery, Datix has you covered. Find out what Datix can do for you.
Don’t be blindsided by how your new products perform on the market every year. Invest in an ERP solution that can offer you the insight you need to make informed decisions about releasing new inventory.
Read other reasons Why Manufacturers Should Invest in a Modern ERP
With 25 years of experience, we understand what it takes to maximize software. Datix will work with you to understand your unique business needs to support your goals. Our team of experts promises to be by your side throughout your implementation and beyond.