NetSuite’s Demand Planning is a great module that helps companies ensure that the right quantity of a product is available at the right time and location. Its automated processes and its ability to analyze NetSuite’s database lead to accurate Demand and Supply Plans.
Additionally, its Demand Planning Reports, (1) Demand History By Item Report, (2) Item Demand Plan By Item, and (3) Item Forecast vs Actual can provide users with clear and valuable information, serving as a foundation for further analyses.
In this article, we will introduce these reports.
Demand History By Item Report
NetSuite uses various methods to analyze sales data in order calculate Demand for future periods. What NetSuite does not do during Demand Planning is to show the basis, i.e., the sales data on which the calculation relies. This gap is filled by the Demand History By Item Report. Depending on what is set in the Inventory Management Preferences (Setup > Accounting > Item Management Preferences > Transactions to Consider), historical sales can be viewed based on Sales Orders or Cash Sales and Invoices. This Report helps if you want to perform a recalculation for the purpose of understanding NetSuite calculation formula, but it can also be downloaded as a CSV file for further calculations.
Tip: Set the column to Month or Week to see the Demand of historical periods.
Item Demand Plan by Item
With the help of the Item Demand Plan by Item Report, the calculated Demands for a selected period can be viewed based on locations of each subsidiary. At the same time, NetSuite can only calculate Demand Plans based on either historical sales, or open Sales that need to be fulfilled in the future.
The methods for analyzing historical data are also limited (Moving Average, Linear Regression, Sales Forecast, Seasonal Average). For more complex analyses and formulas, there is the option to download the Demands into the form of CSV files, manipulate them with third-party systems, and then migrate them back into NetSuite using its according import assistant.
Item Demand Forecast vs Actual
Unfortunately, NetSuite is not capable of initially calculating Demands based on historical data and then adjusting the quantities by the Demands from open transactions, such as Sales Orders that need to be fulfilled in the future. It can only calculate one of the two data types at a time; either Demands based on historical data or Demands based on open transactions.
Fortunately, NetSuite offers the ability to compare the determined Demands with open sales transaction such as Sales Orders or Cash Sales / Invoices. The visible discrepancies can be analyzed to set targets for strategic purchasing/production or sales.
If sales numbers are higher than determined Demands, the purchasing or production department can take targeted action. On the other hand, targeted pricing can be used to reduce growing inventories.
Author: Safar Khan
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