Integrate demand and supply planning

Demand planning + supply planning = integrated business planning

If demand planning is forecasting customer demand, while supply planning is managing supply according to these forecasts, you’d be forgiven for thinking that these functions went hand-in-hand.

All too often though, demand planning and supply planning departments work to different agendas. One driven by ensuring sufficient stock to meet demand and the other by keeping costs down. But even when everyone is singing from the same songsheet (i.e. a strategic consensus plan) there are some things that can never be predicted.

All too often though, demand planning and supply planning departments work to different agenda

Unforeseen events and how to mitigate them

The events of Christmas 2021 were not on any retailer’s Santa List. Disrupted supply chains meant many orders that were due to land in November, were delayed until March. Nowhere is this issue being felt more keenly than in the technology sector, where product obsolescence poses a very real and present risk.

Integrated demand and supply planning gives organisations a better chance of managing exceptions to the demand forecast in a more timely and cost-effective way. Especially when it comes to shipping and logistics.

When both departments are working to a collaborative consensus plan, initiatives can be quickly deployed to mitigate excess, constrained or lumpy supply. For example, if companies are unexpectedly landed with excess stock, they may choose to lean on their supply chain to move stock where there is more demand. Or work together to ascertain the most efficient way to sell stock - optimising their CTC (Cost To Clear) as a team and impacting the business’s bottom line in the process.

A bird’s eye view

The best way to ensure demand planners and supply planners are working together towards a higher plan, is to make that plan easily accessible to all. This is where the right technology is key. An easily digestible dashboard that presents clear and actionable insights means that demand and supply planners can apply their strategic skills where it really matters. With the right people plugging in to the right technology, an integrated business plan can be adapted and optimised in real time, according to real circumstances.

Artificial Intelligence, Machine Learning and Big Data can both enhance forecasting capability and flag exceptions in a more timely way. This increased accuracy and foresight means that demand and supply planners can work in a more aligned way, towards a strategic, business-focused outcome.

Related

July 19, 2022
Demand forecasting for new products

Inject the smarts into your new product planning Consumers now have more choice than ever before - of what to buy, and where to buy it. The explosion of e-commerce has driven product and competitor proliferation to all-new levels, so what worked before (i.e. analysing previous product performance) no longer serves as an accurate indicator […]

Read More
July 19, 2022
Revolutionise your demand forecasting

Forecast.  To predict or estimate a future event or trend. Let’s start with a forecast we’re all very familiar with as an example - the weather. Once upon a time, forecasts were based on historical data captured around certain dates. Then, with the invention of telegraph networks, weather conditions could be observed and shared across […]

Read More
July 27, 2022
Optimise your SKU productivity

Not all SKUs were created equal Many businesses are so focused on building revenue, their profit suffers as a result. Organisations worth their salt know that selling at all costs doesn’t make good business sense. A more sophisticated way to measure and drive success is ROI (Return On Investment). What is the business cost of […]

Read More
July 19, 2022
Move from demand forecasting to demand sensing

Demand forecasting is always wrong. Thankfully. If demand forecasting was a precise science, we would be out of business. Organisations would apply their tried and tested formulas, and would emerge from their endeavours armed with 100% accurate predictions to take into their next phase of demand planning. Their wash-ups would show an exact correlation between […]

Read More
August 8, 2022
Shift from sales forecasting to demand planning

Top-down or bottom-up? How to approach forecasting in a data-driven world. The role of any good Supply Chain Manager is to ensure regular reporting of the variances between top-down executive targets, and the bottom-up demand of the market. Effectively, this is the budgeting process, and achieving a balance between demand and supply is the best […]

Read More
July 27, 2022
Enhance your demand pattern analysis

Understanding demand patterns in the Data Age Demand pattern analysis is becoming increasingly valuable in business, as a way of predicting and preparing for future fluctuations in market demand. The problem is that the “best-practice” models that are still taught and employed today rely solely on historical patterns to make predictions. In reality, looking backwards […]

Read More
July 19, 2022
Level up your Demand Planning

The not-so-basics of Demand Planning At its simplest, effective Demand Planning means reducing the gap between held inventory and actual sales. It’s about meeting demand in the most efficient way possible to help retail organisations avoid stock-outs at one end of the scale, and wastage at the other. Yet this vital role is often drowned […]

Read More
July 19, 2022
Demand forecasting by store

A formula for accurate demand planning at store level (Hint: it doesn’t start with “=”) Technology is the biggest enabler of people in the digital age. Yet arguably, it’s also the biggest threat to the modern day workforce. When it comes to using technology to enhance demand planning in business, harnessing digital tools in a […]

Read More

Want to learn about how
QU can work for you? 

Check out the benefits of the different QU solutions
View QU Solutions

Would you like to see
 QU in action?

Get in touch with us to schedule a demo
Request a Demo
Copyright Quantiful © 2022
linkedin facebook pinterest youtube rss twitter instagram facebook-blank rss-blank linkedin-blank pinterest youtube twitter instagram