DEMAND

PLANNING
Group 09
Neha Parekh (151430)
Nidhi Mehta (151431)
Nirali Lakdawala (151432)
Rahul Reddy (151435)

What is
Demand
Planning?

Demand planning is a multi-step operational supply

chain planning process used to create reliable
forecasts of customer demand and align inventory
levels and supply plans to achieve the targeted level
of customer service desired by a business.
In Short:

Having the Right Product, at the

Right Place, at the
Right Time and at
the Right Price, to satisfy customer
demand.

 Traditional tools (spreadsheets and disconnected,

fragmented systems) can not respond quickly
enough to the rapid pace of change:

Traditional
approach vs
new

Global Sourcing
Longer lead-times
Increased Demand Volatility
Faster Product Lifecycles
More choices & new competitors
Fewer Resources, People, Capacitydoing more
with less.

Greater Demand + Longer

+
Variability
Lead-Times

More Full
Container

Increased
Inventory Risk

Slow Processes, limited collaboration, no consensus

forecasting
Typical Company
Financ
e

Traditional
Approach =
Disconnecte
d

Sales
Forecasts/Quot
as

Marketing
New Products

Budge
t

Manual
processes

E-mail
overloa
d

Invento
ry
Plannin
g

Multiple,
non-integrated
systems

Low forecast accuracy

Departmental/Silo orientation to Supply
Chain Planning
Misalignment between metrics and
objectives
Reactive vs. Proactive/Exception based
Multiple versions of The Truth

Manufacturing
Capacity/Scheduli
ng

Data Characteristics:
Variability
Volatility
Volume
90% of data is generated in last 5
years.
Type of Data:

Type of
Data

Structured Data:
High volume but stratified and
ordered : Point-of-sale
information, customer
information
Unstructured Data:
No strata, no defined field :
Weather forecasting, traffic
data

Demand
Planning
cycle

Kind of
Business
Strategy:
Effective v/s
Responsive

SEASONAL

TREND
9

14

12

ALL ABOUT
DEMAND
PATTERNS

10

5
3

0
Jan

0
Jan Feb Mar Apr May Jun

Growth

Feb Mar Apr May Jun

Jul

Aug Sep Oct Nov Dec

Jul Aug Sep Oct Nov Dec

Decline

Seasonal

Static

Often depends on product

lifecycle and also health of
the Brand
Often can direct total
market
Sets the magnitude of the
forecast

Drives stock holding and

capacity
A clear driver that happens
every year

CYCLICAL

RANDOM
10

Cyclical

ALL ABOUT
DEMAND
PATTERNS

12

10

5
4

1
0
Jan Feb Mar Apr May Jun

Jul

Aug Sep Oct Nov Dec

Random

Often driven by sales

opportunities when they
arise

0
Jan

Feb

Mar

Apr

May

Jun

Jul

Aug Sep

Oct

Nov Dec

Cyclical

Often due to wider economic

factors and over longer
periods

 JDA Demand by JDA Software: for product demand patterns

SAP-SCM by SAP: Integration of various department
PeopleSoft ERP : Demand planning based on statistical
analysis of demand history, causal factors such as events and
promotions, and collaborative input from both employees and
trading partners
FEA Impact of Individual entity on Supply Chain

Technology

Demand planning requires:

Historical data: sales trend for each product, events influenced
demand in the past
Statistical model : To establish correlation between historical
events and trends
Details of marketing, promotions and future planning related
data.
Details on future expected, uncontrollable events that influence
the customer demand, like changes in weather, entry of a
competitor etc.
Capacity constraints in production or Logistics

A
Successful
Analytics
requirement

4 factors to forecasting success: people, process,

technology and analytics.
People: Better communication with sales force team,
Skills up gradation of people by training.
Process: Innovation at each level of process
Technology: Big data, IT, POS
Analysis:
Predictive Analysis
Descriptive Analysis

 Efficient Supply Chain Scheduling

Advantages
of Demand
Planning

Better Labour Management

Adequate Cash Flow
More Accurate Budgeting
Faster market sensing and response
Improved customer service while reducing costs
Improved Inventory management

 DDSN Demand Driven Supply Networks

Demand-driven supply networks are driven from the front by
customer demand vs. push planning (build it and they will
come).
Partners in a supply chain will work more closely to shape
market demand by sharing and collaborating information
goal is to bring the supply chain eco-system into balance.

Recent
Trends

Demand Sensing Closer to the Point of

Consumption
Leverage POS Databetter picture of true market demand
Technological Advances (Big Data) enabling use of retail/store
data

S&OP, Demand Shaping, and Business

Intelligence/Analytics
Make better and more profitable business decisions, more
quickly.

 Seamless integration of suppliers, manufacturing,

warehousing and distribution components in its
supply chain.

Walmart
Example

Implemented the first companywide usage of

Universal Product Bar Codes where store level
information was immediately collected and analyzed.
The data helped the store manager to determine
what products were selling and at what quantity.
Build the Retail Link Database System that supported
inventory management. Through a satellite network,
analysts can access the Real Link database and
forecast supplier demands to the supplier network
which displays real time data from cash registers
and to Wal-Mart's distribution centers.
Efficient Collaborative Planning , Forecasting and
Replenishment(CPFR) scheme : the suppliers and
manufacturers within the supply chain synchronize
their demand estimations.

Challenges
faced in
Demand
planning

Accurate monitoring of all SKUs and stock levels

Availability of historic sales forecasting data
New product introductions
Centralizing stock control

References

APICS (2015) Introduction to Forecasting and Demand

Planning [Online] http://
www.apics.org/docs/default-source/events-apics-2014
-dubai/introduction-to-forecasting-and-demand-plann
ing.pdf?sfvrsn=2
http://
cmuscm.blogspot.in/2014/09/demand-forecasting-wal
mart-way.html
http://www.eazystock.com/blog/2015/10/02/5-demand-p
lanning-challenges-facing-distributors-today
/

Demand
Planning
Makes
running a
business a
little bit
easier

THANK YOU