Demand Planning Process Explained In 7 Easy Steps

1. Contact Us 120 Matheson Boulevard East, Suite 203, Mississauga, ON, Canada L4Z1X1 Phone: 647 620 9490 Website: https://www.educationedge.ca Businesses utilise demand planning, which is a cross-functional process, to fulfil customer demand while minimising supply chain or inventory management disturbances. Demand planning is a continual activity that is used to respond to changes in the market. This is done by looking at a company's sales, customer trends, previous sales, and seasonal data. The demand plan lays out the amount, type, and location of goods you'll need to suit your customers' needs. These seven steps are roughly followed by all demand plans: STEP 1: Assemble Your Team: Create a cross-functional team that is well-coordinated and has clearly defined roles and duties. STEP 2: Define Internal Data: Agree on which sales data, inventory turnover, lead times, and other factors are important to consider when projecting future demand. STEP 3: Add External Data: To complete out your plan, use the information you acquired on recent performance, delivery schedules, purchasing trends, and so on. STEP 4: Make a Statistical Demand Forecast: Collaborate to determine which forecasting model is best for your firm and to create it. STEP 5: Review and Refine: Bring your demand projection to stakeholders for evaluation and analysis, along with any new data, to evaluate if the estimates are still valid. Then, as needed, tweak your data. STEP 6: Check Your Inventory: Calculate the inventory levels you'll need to match your demand projection, plus a little more for wiggle room. Identify providers who can assist you in meeting this demand and make sure they can reach your deadline. STEP 7: Track Results: To evaluate the efficiency of your demand plan, use key performance indicators (KPIs). Make any necessary changes.

2. Demand planning may improve your company's profitability, customer satisfaction, and production planning, inventory management, and supply chain operations efficiency. While achieving a supply- and-demand balance is difficult, the benefits are enormous. On the one hand, there are inventory expenses to consider. Keeping excess inventory on hand is costly, and that money could be better used elsewhere in the company. There are additional warehouse fees to consider, as well as the risk that the goods would lose its value. That's a significant amount of money to lose. Need more insights on the same? Enrol in a PFMP course and training program today!