Demand Planning
Streamline Your Planning and Execution Processes with Accurate Demand Plans

What is Demand Planning?

Demand planning provides you with several tools to generate forecasts for various scenarios or for specific parts of your business. Using historical data and scientifically based statistical algorithms, it allows you to improve the accuracy of revenue forecasts, align inventory levels with predictable changes in demand, and enhance profitability for a given channel or product.

We are all known about the statistical forecasting process in a standard manner, which means loading the sales data and sales history-cleansing process, finally, execute the statistical forecast methods identify the better forecast error method adopt to business data. This process may vary but an overall goal to achieve a consensus plan, during this process multiple business stakeholders involve like sales, marketing, region and global teams. This process deal with mid-long term planning (12,18,24 months).

What is Demand Sensing?

Demand sensing is a forecasting method that leverages new mathematical techniques and near real-time information to create an accurate forecast of demand, based on the current realities of the supply chain. Gartner, Inc. insight on-demand sensing can be found in its report, “Supply Chain Strategy for Manufacturing Leaders: The Handbook for Becoming Demand Driven.

Traditionally, forecasting accuracy was based on time series techniques that create a forecast based on prior sales history and draws on several years of data to provide insights into predictable seasonal patterns. However, past sales are frequently a poor predictor of future sales. Demand sensing is fundamentally different in that it uses a much broader range of demand signals (including current data from the supply chain) and different mathematics to create a more accurate forecast that responds to real-world events such as market shifts, weather changes, natural disasters, consumer buying behavior etc.

Demand planning is a supply chain management process of forecasting, or predicting, the demand for products to ensure they can be delivered and satisfy customers. The goal is to strike a balance between having sufficient inventory levels to meet customer needs without having a surplus.

SAP Integrated Business Planning (IBP), which is powered by SAP HANA, is a cloud-based next-generation planning solution that helps overcome key supply chain challenges and enables organizations ensure smooth and efficient supply chain and planning processes. The solution was designed to improve efficiency, accuracy, and speed as a result of getting, organizing, and analyzing significantly large amounts of data with ease.

Why is demand planning important?

Demand planning is a cross-functional process that helps businesses meet customer demand for products while minimizing excess inventory and avoiding supply chain disruptions. It can increase profitability and customer satisfaction and lead to efficiency gains.

Benefit of Demand Planning

Seven advantages of implementing integrated demand and supply management

Increased adaptability to demand volatility

Improved value creation

Better external and internal collaboration

More efficient and strategic resource allocation

Team empowerment

Focus on profitability

Increased execution and operational efficiency

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