How NetSuite Improves Supply Chain by Automated Forecast & Demand Planning
To manage the supply chain has been one of the most time consuming task for product-based business, and the rapid cost rising and global shortage might add up the difficulty. Luckily, technology has found its way to alleviate the challenges.
Using NetSuite, system can automate many of the steps that go into the planning and execution of production, inventory management and order fulfilment. Mastering supply chain management requires a strong linkage between long-range forecasting, medium-range planning, and short-range execution. Getting those connections right can reduce costs and set the right expectations with customers to avoid costly last-minute adjustments.
What To Do Before Budget
Businesses usually start supply chain planning with long-range forecasting six to 12 months out. The forecast is critical to budgeting, because a company can only build a budget once it has an idea of expected sales and revenue.
NetSuite’s Demand Planning module can handle basic forecasts based on historical sales by item and future-dated transactions in the CRM system. It then uses that information to produce bottom-up forecasts.
The NetSuite Planning and Budgeting module builds on those capabilities, enabling users to create forecasts by channel, specific customer and other dimensions. The solution can also combine multiple forecasts from different departments to create a master forecast for those that take a collaborative approach to forecasting. NetSuite Planning and Budgeting supports both bottom-up and top-down approaches.
But developments over the last 18-plus months have been anything but normal, so using purely historical data can be problematic. That’s where NetSuite Planning and Budgeting’s scenario planning capabilities come in. It has scenario planning tools that use machine learning to create best-case and worst-case demand forecasts based on demand volatility, seasonality and other relevant trends. The solution then highlights the most likely outcome.
Both NetSuite Demand Planning and NetSuite Planning and Budgeting pull transactional data directly from NetSuite, so users can frequently and easily update these predictions with the latest numbers. By eliminating the need for the finance team to enter or update this information manually, forecasting becomes a much less time-intensive process.
Striking the Right Balance with Supplies
The forecast, once finalised, then becomes the basis for the supply planning phase. At this stage, the company is trying to ensure it has the right parts, materials or finished goods in the right place, at the right time, to satisfy demand.
NetSuite’s supply planning engine, powered by the Material Requirements Planning (MRP) and master production scheduling modules, assists with this piece of the equation by breaking down forecasted demand by item and location for each month. The solution can then consider all available demand and supply data to determine when the company is expected to run out of certain inventory in a specific location. A decision-maker could then reallocate supplies to different locations or adjust purchase orders based on those stock-out dates.