DEMAND MANAGEMENT

Stepan Baboglo 2010503092

What do we mean by demand?

Demand is the total number of requests for a

resource. Demand management is all about making choices.

Request: an act of asking politely or formally for something

Demand Management
The demand management

process captures all work proposals in one place, guides the proposals through a multistage governance process, helps customers make decisions about which proposals to approve, and tracks progress on project execution until the work is completed.
Approve: officially agree to or accept as satisfactory Proposal: a plan or suggestion, especially a formal or written one, put forward for consideration by others

Traditional Demand Management

Covers how a firm integrates information from

and about its customers, internal and external to the firm, into the manufacturing planning and control systems. How a firm integrates information from its customers with information about the firms goals and capabilities, to determine what should be produced in the future.

Demand Management
Demand Management is based on forecast

and plans. In DM, forecasts of the quantities and timing of customer demand are developed. What do we actually plan to deliver to customers each period is the output of the process.

Demand management is
The process of ensuring that market demand and

the companys capabilities are in synchronization Recognizing all demands for products and services to support the marketplace. Doing what is required to help make the demand happen Prioritizing demand when supply is lacking. Planning and using resources for profitable business results

Optimize business processes for demand fulfillment and improve efficiency of services delivered

Complete projects on time Reduce costs Increase client satisfaction Assess the availability and skill sets of resources

Supply and Demand Through an Integrated Solution

Manage business

demand and customer satisfaction using a defined and repeatable approach. Collaborate with business counterparts using a transparent decision-making process.

Organizations that are switching

to the demand-supply model enjoy significant gains in productivity and prioritization of investments.

McKinsey Quarterly, September 2006, Splitting Demand From Supply in IT by David Mark and Diogo P. Rau

Demand management components

Goal customer service levels New product introductions Distribution resource planning Customer order entry and promising Sales and marketing plans Inventory targets Product commitments Interplant shipments Demand forecasting at item and aggregate levels

COMPONENTS OF DEMAND
Demand that adds value is desirable and met

Demand that adds value, is desirable, but

cannot be met Demand that does not add value, undesirable, and should not be met.

IMPORTANT ISSUES
Market segmentation

Customer classification
Product ranking

Market segmentation
Growth

Commonality of offering needs

Response to brands Strategic importance Financial attractiveness

Customer classification
Customer size

Customer technology
Company sale/ company share Business quality Importance to the value chain Opportunities for survival Willingness for alliance

Product ranking
Profitability

Customers value for product

Competitive offerings Patent position Asset capability

WHY FORECAST AND PLANS ARE IMPORTANT

A manufacturing manager cannot be held

responsible for not getting a forecast right. A manufacturing manager can and should be held responsible for making their plans.

WHY FORECAST AND PLANS ARE IMPORTANT

Typical demand management phases are

create, select, plan, and manage. Demand management is a concept that integrates project proposals, portfolio analysis, and project management through workflows.

WHY FORECAST AND PLANS ARE IMPORTANT

The goal of demand management is to enable

customers to propose, view, categorize, prioritize, select, and track projects within their organization. Demand Management is based on a forecast and planning because a manufacturing manager cannot be held responsible for not getting a forecast right. Manufacturing manager can and should be held responsible for making their plans.

Following figure shows the four phases of demand

management and how they fit together.

BENEFITS OF DEMAND MANAGEMENT

Control over product availability

Confidence of sales force in ability to deliver

product Smoother product introductions Improved ability to respond to change A single game plan, based on the same set of numbers

BENEFITS OF DEMAND MANAGEMENT

With the Demand Management, organizations

can streamline approval processes, while ensuring that Information Technologies (IT) priorities are aligned with the broader business objectives and that approved initiatives will deliver maximum business value.
Streamline: make (an organization or system) more efficient and effective by employing faster or simpler working methods

Priority: a thing that is regarded as more important than another

Thanks for listening..