What is demand planning software?

Demand planning software forecasts demand for all of your products based on consolidated data, seasonality, promotions and customer behaviour. The primary goal of demand planning software is to help businesses optimize inventory levels, streamline production schedules, and ensure sufficient stock availability to meet customer needs while minimizing excess inventory and tying up cashflow.

What features should you look for in a demand planning software?

When selecting demand planning software it is essential to consider how the platform can access and store data. The more detail you can forecast to like by sales value, sales cost, stock availability and number of invoices the better the accuracy. Ensure the software can accept supply chain management information from the warehouse and beyond as well as pertinent information from your ERP as well as be able to customize the databases to support your business nuances. Effective demand planning often requires input from multiple stakeholders across different departments. Look for software that facilitates collaboration by enabling teams to share data, insights, and feedback in real-time. The software should provide powerful analytics and reporting capabilities to track forecast accuracy, monitor key performance indicators (KPIs),and identify trends and patterns in demand data. Look for customizable dashboards and real-time insights to support data-driven decision-making.

What is the difference between demand planning and demand forecasting?

Demand planning and demand forecasting are closely related concepts in business operations and supply chain management, but they serve different purposes and involve distinct processes. Demand forecasting involves predicting future customer demand for a product or service based on historical data, market trends, seasonality, and current conditions. Demand planning involves translating demand forecasts into plans and strategies to ensure that the right products are available in the right quantities at the right time.

Can one software solution help with both inventory management and demand forecasting?

Yes, many software solutions are designed to handle both inventory management and demand forecasting within a single integrated platform. These types of software offer features to help businesses optimize their inventory levels while accurately predicting future demand. Look out for platforms that offer Artificial Intelligence capability, multiple system and data integration plus reporting and analytics.

Why is Phocas a useful all-in-one demand planning solution?

The Phocas platform integrates data from various sources, including historical sales data, inventory levels, customer orders and market trends to facilitate both inventory management and demand forecasting processes. Phocas includes advanced forecasting algorithms and models to generate accurate demand forecasts. Planners can adjust parameters and perform scenario analysis to improve forecast accuracy.

Demand Planning

Demand planning that pays

Most mid-market distribution businesses are already doing some form of demand planning. The ones that get it right start with a live sales forecast – and run it continuously across connected data and aligned teams.

Less capital tied up on stock, more margin protection.

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What accurate planning looks like

Demand planning is the continuous process of forecasting customer demand to align financial goals with operational capacity. However, only 11% of distributors rate their demand planning as very accurate, highlighting a need for improved forecast accuracy.* So, what are the critical drivers of inventory management success?

*Inventory Trends in Wholesale Distribution Report 2026

A live sales forecast

Good demand planning starts with what sales expect to sell – formed by pipeline and customer conversations, not just historical orders.

One plan, three teams

When purchasing, sales and finance all work from the same numbers, gaps close fast. No more month-end surprises or promises the warehouse can't keep.

Updated as the market moves

A plan that's updated monthly was accurate once a month. The best demand planners update continuously – catching changes before they become stock problems.

External pressures making accurate demand planning more difficult

When we asked 100+ distributors to rank their biggest challenges, four came out on top – and every one of them makes demand planning harder to get right.

Source: Inventory Trends in Wholesale Distribution Report 2026

Economic uncertainty

Inflation and financial risk are influencing inventory decisions directly – creating pressure to hold more stock while managing tighter margins at the same time.

Greater competition

70% of distributors now carry 5,000+ SKUs as a customer retention strategy, making accurate demand planning across a larger range more critical than ever.

Supply chain disruption

Extended lead times are making delivery schedules longer and less predictable. 29% of distributors plan to diversify their supplier networks – but without forward demand visibility, a broader supplier base becomes harder to manage, not easier.

Demand volatility

Customer buying behaviour is increasingly cautious and less predictable. Historical data alone isn’t enough – which is why 54% of distributors are prioritising a new demand planning approach to get ahead of volatile buying patterns.

How Phocas powers demand planning

Connected data: Pull sales, purchasing and inventory data from your ERP into one view
Forecast demand: Plan expected sales by supplier, product class or SKU using sales history and forecasts
Project stock levels: Automatically calculate opening stock, planned sales, purchases and EOM balances
Spot risks early: See when stock will run low or go negative so you can act fast
Plan orders with confidence: Use supplier lead times to know exactly when to place purchase orders

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See what's selling, know what to buy

View rolling 12-month sales alongside current stock on hand by product and location
Calculate months cover instantly to know exactly how long your current stock will last
Spot which products, categories or warehouses need attention before stock runs out
Automate complex inventory calculations in a few clicks – no spreadsheets needed
Give purchasing and finance shared, real-time visibility for confident stock decisions

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Connect planning across your business

Effective demand planning depends on data you can trust. Phocas integrates with your existing ERP to create one clear view of sales, stock and financial performance. Two Phocas products do the core demand planning work – Analytics for visibility across your inventory and sales data, and Budgets & Forecasts to build and manage demand planning.

Frequently asked questions

Understand the past, operate better today, and plan well for the future

Whether you want to get your data organized for your team or you’re looking to combine business intelligence capabilities with financial reporting, planning and forecasting… We can help.

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Demand planning that pays