principles of demand planning | demand management

The core principle of demand management is to deliver a sales revenue target and a profit target (EBIT) for your organisation. In our view, this is achieved by continuously balancing the following dynamics of your supply chain:

Changing customer requirements
Distribution channels
Changing product portfolio
Supplier response times
Geographic supply chain constraints
Capability of your forecasting system

traps with demand planning | demand management

Too many organisations are driven by the need to achieve results quickly and decide to invest in forecasting software packages with the immediate expectation that the software will improve service levels, reduce inventory and improve the organisations cash position.

In our view, this approach will have a low level of success as it is not addressing all of the touch points throughout the entire demand management and supply chain process and if implemented in isolation, cannot address the following problems that tend to limit your organisation from achieving its goals:

Inaccurate inventory data
The ERP system is not able to support processing vast amounts of data so frequently
Wrong and late supplier deliveries
Obsolete inventory
Wrong UOM
BOM inaccuracies
Routing Inaccuracies
Wrong costing at SKU levels

It is important to review the entire process that drives your organisation from a demand management perspective and then work towards synchronising all of the touch points along the supply chain from source of supply through to final delivery.

the benefits of integrated demand management

Once your organisation has adopted a framework for an integrated demand management process which overlaps divisional, geographic and technology boundaries, a number of tangible and non-tangible benefits may be realised which will provide your business or organisation with a foundation for continuous improvement:

Improved supply chain visibility across the entire network of stakeholders
Improved collaboration opportunities as supplier and customer networks can be linked via web solutions
Linkage between ERP systems and Forecast system within a single or multiple environment network will allow regular and frequent data modelling opportunities to test changes in demand, lot sizes, lead-time variations, changes to manufacturing production times etc.
The ability to move from planning to managing touch points across the supply chain to further improve supply chain response to meet changing client demands.
Improved staff retention levels.
Ability to make quicker, better and accurate transport mode decisions for inbound air or sea mix consignments.
Improves EBIT position
Manage inventory levels against inventory policy which will improve your organisations cash position and create investment opportunities in the right areas of your business.

Select a Supply Chain and Logistics Assessment that identifies real improvement.

We offer a range of assessments that are tailored to specific functions within your oganisation that require review. Depending on the scope of works or the scale of your organisation, our assessments are typically completed within 2 weeks of commencement for single site entities. Reference sites available on request.