Demand planning and accurate forecasting is an essential component of operations management as it ensures that you have enough products on hand or scheduled for production to meet future demands.
In most organizations, SKUs or “Stock Keeping Units” are used to identify each individual product or service offered using an alphanumeric code. SKUs are usually specific to retailers and help them manage their inventory.
With SKUs, customers and retailers are easily able to distinguish between individual products and tell the differences among them. While SKUs are beneficial in terms of identifying products, having too many SKUs can lead to unnecessary business complexity and an overabundance of suppliers, data, people, and analysis.
Determining how many SKUs should be kept can be challenging. On one hand, you want to give your customers a variety of products as well as attributes such as size, color, pack sizes, etc. On the other hand, it can be very difficult to accurately develop a forecast for production when you have a lot of products and variations.
A question that is prominent among operations is “How many SKUs can an individual plan?”
The answer to this question really depends on the difficulty and complexity of developing an accurate demand forecast. Therefore, there is no single answer to this question as it depends on multiple variables such as the nature of your business, the types of products you produce, as well as the data / technology used for demand forecasting.
The variables associated with SKUs include the following:
A software that can aid in generating demand forecasts and eliminating SKUs is PlanetTogether’s Advanced Planning and Scheduling Software. PlanetTogether is a software that can provide a thorough insight into the operation and eliminate any unwanted cost and boost production efficiency.
We’re able to make strategic decisions that improve operations. We can proactively prepare for anticipated increases or slowdowns in demand.
In addition, PlanetTogether offers analytics reports and dashboards which allow you to have a detailed look at your data and investigate certain KPIs that are important during SKU rationalization.
SKU rationalization refers to the process of determining whether certain products should be continued in the effort of reducing the total number of items to reduce the complexity of the business operation.
The bottom line is that using an advanced planning and scheduling software will help you determine which products are more profitable for your business while simultaneously allowing you to generate more accurate forecasts and handle more SKUs during the production planning process.
Advanced Planning and Scheduling Softwares have become a must for modern-day manufacturing operations as customer demand for increased product assortment, fast delivery, and downward cost pressures become prevalent. These systems help planners save time while providing greater agility in updating ever-changing priorities, production schedules, and inventory plans. APS Systems can be quickly integrated with an ERP/MRP software to fill the gaps where these systems lack planning and scheduling flexibility, accuracy, and efficiency.
With PlanetTogether APS you can:
The implementation of an Advanced Planning and Scheduling (APS) Software will take your manufacturing operations to the next level of production efficiency by taking advantage of the operational data you already possess in your ERP system. APS is a step in the right direction of efficiency and lean manufacturing production enhancement. Try out a free trial or demo!