Demand planning has always been an essential but tricky method to forecast for businesses. However, with recent gains in the tech industry, garnering accurate market predictions, it has become easier.
One development that has been changing the way businesses work is Artificial Intelligence (AI). Machine Learning (ML), which is the essence of AI, has been developing rapidly over the past few years.
In fact, 70 percent of forecasting professionals have indicated they see AI as a game-changer in their industry.
What is AI?
AI refers to a computer’s ability to “learn” with each user interaction.
Although AI has been around since Alan Turing defined it in the 1950s, technical advancements have lead to it being integrated more into our daily lives. While largely known for its use in sales and marketing, its powerful ability to analyse and predict can also go a long way in enhancing demand planning.
In sales, the data that is collected has been used to better narrow down offers for customers. While in the marketing world, AI helps brands understand their customers better and build relationships.
For demand planning, AI can also provide valuable tools and resources. With reliable prediction capability, the system is able to develop forecasts that are more accurate than human calculations. This information can also be done at a fraction of the time it would take employees to wade through.
Often times, AI can even uncover trends or data insight that may be missed by the human eye, as noted by experts like business consultant and co-founding partner of NorthFind Partners, Jonathon Karelse.
How does AI work in demand planning?
Some of the ways that AI can improve the demand planning process include the amount of information processed and up-to-date analytics.
1.Handling large amounts of data: machine learning thrives on having a lot of material to work with. Its algorithms get better and better the more information you can feed into it.
2.Real-time reaction: one of the weaknesses of demand planning has been the inability to adapt to changes, in particular in real-time. However, because of the nature of the system, AI is capable of incorporating current changes into its forecasts.
Experts like Jonathon Karelse note that AI has been changing the landscape for many industries and professions. Demand planning and business forecasting have also been adapting to a data-driven world. One study found that 55 percent of organizations have stated they will be investing more into AI technology in the future. That is good news for forecast professionals.