Understanding Demand Planning
Demand planning plays a crucial role in forecasting future demand for products or services accurately. It involves delivering what customers want, where, when, and in what quantities while enhancing operational efficiency and profitability.
Importance of Demand Planning
Demand planning aims to strike a balance, ensuring the right inventory levels to meet customer demand without shortages or excess stock. In today's complex business environment, factors like disruption, rapidly changing demand, and evolving consumer behavior make effective demand planning vital for avoiding stockouts and maximizing revenue.
Key Elements of Demand Planning
Demand planning is a collaborative process involving stakeholders like Sales, Marketing, Finance, and Purchasing, guided by the demand planner. Key inputs include historical data, external signals, demand forecasting, and demand sensing to create a realistic forecast.
Best Practices for Demand Planning
Companies utilize demand forecasting and concurrent planning to synchronize plans across time horizons, enhancing preparedness for changes. Supply chain segmentation helps in prioritizing forecast analysis, while cross-functional collaboration ensures data accuracy and realistic plans. Leveraging advanced demand planning technology facilitates improved supply chain flexibility and profitability.