Demand Planning

Many businesses these days recognize that demand planning is an important part of their operations, but they have trouble implementing it. This article lays out several tips that you should keep in mind when engaging in demand planning. Following these tips will make your plans more dynamic, efficient, and accurate. Read on to learn several important tips for successful demand planning.

Demand Planning is Not a Standalone Activity

One of the biggest mistakes that businesses make when implementing demand planning is treating it like a standalone activity. Demand planning is part of integrated business planning and sales operations, not a standalone activity. Instead of simply creating a demand plan, your business should create an integrated business plan that incorporates demand planning. This ensures that the demand planning that your business engages in will influence all the departments of the company.

Carefully Choose the Levels At Which You Plan

There are three different levels at which demand planning can be carried out: the product family level, the geographic level, and the customer level. It will require trial and error to determine which level the demand planning in your business should operate at. You should be ready and willing to change your business’ approach to demand planning based on changes to your business’ operations.

Keep Demand Planning Collaborative

Demand planning has its roots in statistics, but it must be a collaborative process instead of a process only carried out by your company’s statisticians. It is important to remember that the demand planning your company does will affect the operations of numerous departments throughout the company. Personnel from multiple departments should work with your statisticians so that their practical knowledge is blended with the theoretical statistics used in demand planning.

Demand Planning is Much More Than Forecasting

One of the biggest mistakes that companies make when engaging in demand planning is only focusing on the forecast. Forecasting is certainly an important component of demand planning, but it is not the only part of the process. Companies should use the forecasted demand as a starting point, but they should continue to drive demand in an attempt to exceed the forecast. Many companies use promotions and marketing events to attempt to influence demand in this way.

Educate All Employees Involved in Demand Planning

As previously mentioned, it is vital that demand planning be a collaborative process. However, it is not enough to simply include employees from various departments in the demand planning process. These employees have to be properly educated so that they understand how their contributions may be used to come up with forecasts. If they are not properly educated, they may end up doing more harm than good during the demand planning process.

Choose Your Demand Planning Software Wisely

Successful demand planning requires a powerful software solution. It is very important that your company research the different demand planning solutions and speak to representatives of the companies that produce this software. Choosing the right software program for your company’s needs can significantly affect your profits for years to come.