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A critical role in the organization is managing demand which is the actual sales happening now in any field of business, A demand planner has to deal with Uncertainty and huge amount of data and be knowledgeable of a Company Business , Strategy ,Economy , Geographical areas where the company operates , Supply-side material and production planning concepts and above all the product categories and families, Stock keeping units SKU’s profitability and Sales History , Financial Statements and Sales and Marketing Basics and Fundamentals.
A demand planner isn’t a desktop research job where historical data are analyzed to create a baseline forecast, You need to be close to the decision-making committee and be part of it through moderating and leading Sales and Operations (S&OP) or Integrated Business Planning (IBP) and close to the consumer with real-time data which shapes demand now more than history and the past trends.
So what is the main role of the Demand Planning Team?
Generate a Rolling Forecast of 12-18 months which includes all activities, promotions, and New product developments (NPD’s)
GateKeeper for S&OP meetings to ensure Organization Top and bottom lines are met each quarter.
Improve Sales Forecast accuracy as it’s a basis for material and production planning.
Collaborate with all Departments to ensure deadlines are met for a perfect integrated business plan.
Collaborate with Retailers and distributors for better inventory replenishment (CPFR) collaborative planning, forecasting, and replenishment
Find solutions with Information Technology IT to make use of ERP systems if available as efficiently as possible for faster planning and plan sign off by upper management.
Choose the suitable Forecasting Method based on Organization activities, Sophistication of Products, Demand patterns (Stable vs. Erratic) and make sure it’s applied in the best way possible with all concerned departments.
Challenge and as accurately as possible estimate promotions and new product developments to ensure goods Availability, Minimize stock-outs and ensure payback on Marketing spent.
Balance Supply and Demand as by smooth unified forecast an organization will have better control over Material and production planning and costs
Without Demand planning that is the situation panic and fire- fighting mood.
Demand Management KPIs:
Which is Actual Demand vs. Forecast set at the longest material lead time every month ex: If I have a lead time of 3 months to buy a material essential for production I need to measure today Sales vs. Forecast placed for this month Sales at 3 Months earlier.
The difference between forecast and actual demand sign positive if the forecast is over demand (over Forecasting) negative if the forecast is below demand the percentage difference has to be monitored and the occurrence of the signature if repeated
3 -6 periods an Organization may be facing big financial and customer issues.
To summarize Demand Management is a Continuous Process that aims to respond fast to changes in consumer preferences aiming to Improve Customer Service and Organization Profitability by efficiently managing your Inventory levels and Costs.
For more information join our CPIM P1 – Certified Production and Inventory Management– training, it is an introductory program for production and inventory management personnel that explains fundamental relationships among the activities that occur in the supply chain from suppliers to customers.
Mr. Ahmed El Hamamsy
S&OP Lead and Planning Manager.