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For Shopify merchants who manage the end-to-end production of their finished goods, raw materials is often where it all begins.
But, as per our customers, it is one of the hardest things to get right. Fluctuating prices, unpredictable availability, and aligning material procurement with demand make managing raw materials a major pain point.
Addressing this requires a shared visibility into three key pieces of data: customer demand for finished goods, finished goods availability, and the raw materials required to make those finished goods. And we’re excited to introduce our new Production Planning feature that brings this shared visibility to life.
Common Challenges of Production Planning
Below are some of the most common issues Shopify merchants face when managing and forecasting raw materials.
1. Data gaps between demand and supply
Most Shopify stores struggle to accurately match their raw material purchases with actual customer demand. They often have separate dashboards or even tools for their current inventory, incoming orders, and raw material needs. This leads to either overstocking expensive components or running out at critical times.
2. Reliance on manual processes
For many Shopify businesses, production planning still involves spreadsheets, emails, and manual updates. A lack of real-time planning not only increases the risk of mistakes but also makes it difficult to track changes.
Manual workflows limit agility and prevent businesses from making quick, data-backed decisions needed to maintain uninterrupted operations.
3.Seasonality and trends
Raw materials can fluctuate wildly with seasonal changes and market trends. Aligning these is another challenge. It's important to account for factors like holiday demand spikes, sales events, and promotional periods when planning your raw materials inventory.
Without a cohesive up-to-date view of finished goods and raw materials, businesses end up planning on the basis of siloed data leading to a mismatch between production and actual market demand.
4. Different supplier lead times
Supplier lead times vary greatly, and Shopify businesses often work with multiple suppliers, each with different delivery schedules. In the race to align the delivery of tens and hundreds of different components, you end up with production delays.
A predictive system can aggregate all the data to suggest the best time to order raw materials and in what quantity while considering safety stock so that you’re always on track with your production.
Why We Built the Production Planning Feature
At Prediko, we listen to our customers closely and every feature we build is rooted in addressing the real-world challenges Shopify businesses face. A strong raw materials supply chain is the foundation of any successful Shopify business.
After a deep understanding of our customers’ raw materials forecasting challenges, we are excited to launch production planning in Prediko, so that you can
- Confidently plan your production inventory based on the demand for your finished goods. Get a complete, connected planning experience where every item is linked to your upcoming plan, ensuring you're always prepared to meet customer needs
- Get up-to-the-minute visibility into material availability, eliminating guesswork and wasted costs on last-minute supplies
- Access real-time suggestions for smarter and faster decisions, allowing you to adapt quickly to market changes and uncertainties
Our goal is to empower you to focus on growth and innovation without the stress of battling material shortages or excess stock.
How Does it Work?
We have released a new and upgraded Raw Materials Dashboard that now includes granular and predictive metrics, helping Shopify businesses manage and forecast their inventory effectively.
These include
- Health (now): This column indicates the current status of your inventory, such as "Out Of Stock" or "Overstock." With inventory health at a glance, you can better prioritize actions.
- To Buy (live): This column shows the number of units needed and the total cost, providing real-time insight into procurement needs.
- Best Order Date: This predictive metric suggests optimal ordering times, such as "Buy Now" or "Buy before a specific date” to prevent shortages.
- Days of Cover: This shows how many days' worth of raw materials you have based on current demand, helping you plan replenishment in advance.
- Safety Stock Days: Indicating the additional buffer days beyond regular stock levels, this metric lets you manage uncertainties and ensure a continuous supply chain.
Who is it For?
Prediko’s Production Planning seamlessly connects with your finished goods inventory plan. It is perfect for Shopify stores that manage both raw materials and finished goods simultaneously.
These stores may vary in terms of operations, such as
- Manufacturing business: Shopify stores involved in manufacturing products get access to the right materials at the right time with Prediko, allowing them to align raw material procurement with manufacturing schedules.
- Assembly business: With real-time visibility into materials, businesses that have an assembly line can better coordinate to match finished goods demand, preventing interruptions and ensuring timely fulfillment.
- Custom or made-to-order product business: Stores that sell custom or made-to-order items can use Prediko to predict the exact amount of raw materials needed to fulfill the received orders.
- Subscription box services: Businesses that regularly put together boxes with specific products can forecast material needs for packaging and other supplies using Prediko to avoid shortages or excess stock.
No matter your workflow, Prediko gives you a connected planning experience, making it easy to manage raw materials and forecast demand aligned with your finished goods plan.
How can Prediko’s Production Planning Benefit You?
Using the Production Planning feature can improve your business outcomes and operations in following ways:
1. Cut down stockouts and overstocks
With a clear view of inventory health, Prediko allows you to spot and address raw material shortages early. This proactivity lets you meet your production needs, avoid excess stock locking up your capital, and prevent finished goods stockouts that negatively impact customer satisfaction.
2. Improve production efficiency
With regular buying suggestions, you know exactly what and how much to order. This ensures that production processes are not halted due to material shortages and customer orders are fulfilled on time.
3. Sync raw materials planning with finished goods demand
Prediko connects your raw materials planning directly to finished goods demand, providing repurchase suggestions based on actual sales data.
It also factors in safety stock and shows you days of cover so that you can replenish to always have the optimal amount of raw materials. This helps mitigate risks from unexpected demand spikes or supply chain disruptions.
4. Better supplier negotiations
When you know which raw materials are needed on which dates, you can plan ahead to get leverage in supplier discussions with data-backed order timing and quantities. This way, you can negotiate better terms, discounts, and delivery schedules, building a cost-efficient supply chain in the long run.
Forecast Both Finished Goods and Raw Materials Inventory with Prediko
No need to plan in silos anymore. Prediko now offers a connected planning experience to forecast raw materials linked to your upcoming inventory plan.
Leave your manual error-prone processes behind and beat all production planning challenges with Prediko. Cut down overstock and stockouts, negotiate better terms with suppliers, improve production efficiency, and reduce risk in your supply chain.
Whether you run a subscription-based business, handle custom orders, manage manufacturing or assembly operations, or have any other out-of-the-box workflows, we’ve got your back. Book a demo with the Prediko team to learn how it works.
