Top 10 demand planning strategies

Influenced by many factors within and out of your control, demand planners are rarely congratulated and often only receive notoriety according to the extent of an error. We have all heard of the bull-whip effect and it is as true today as it ever was in modern, elongated global supply chains, where small errors at the front are magnified throughout process. Test yourself against these 10 tips from Infor to gauge your preparedness. 

1)    Get the process right. Demand Planning is a sub-process within Sales and Operations Planning or Integrated Business Planning, not a stand-alone activity. Create an integrated business plan that is a cross-company activity and drives the rest of the business forward for profitably meeting customer demand.

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2)    Decide what levels you need to plan demand at that makes sense for your business.  Some companies analyse and plan demand at the product family level, customer level or geographic level. The way you forecast and plan demand is unique to your business. Don’t be dictated by limitations of your IT technologies – and be prepared to change how you plan demand according to changes in your business.

3)    Demand Planning is a collaborative process – not a test of statistical algorithms. The statistics provide a solid foundation to work with, but the real value comes from over-laying knowledge that systems cannot possibly know. Deploy internal collaboration before external collaboration recognizing the closer you get to the true demand signal, the better the forecast will be.

4)    Remember demand planning is not just forecasting. Forecasting is a component of demand planning and relates to your best estimate of future demand. Companies who excel in this area will challenge the forecast (and the integrated business plan) and seek opportunities to influence demand through marketing events and promotions to bring the forecast more in line with the company plan.

5)    You can’t control what you can’t measure. Put the right set of linked key performance indicators in place and measure regularly against these.

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