top of page

Demand Management -Developing a Process Today that will Drive your Future Growth

Good businesses are full of excellent processes; product development, customer order fulfilment, production, shipping, and distribution and in most cases, these processes also have a budget, resources and people performing and improving the processes.

However, when it comes to Demand Management, generally we don’t see mature processes in place instead ‘ad hoc’ people, usually the salesman, sucking their thumbs raw at month end and trying to satisfy the boss with a forecast for the next month, or if we are lucky, two months! There is generally no budget, few resources and nobody dedicated to ensure that this important task takes place, and more importantly, is improved.

Let’s face it, if you don’t have a reasonable idea of your forecasted demand, how can the planners and factory make a credible job of satisfying the true demand?

So, let’s see what needs to be done to improve the situation and achieve a reasonable forecast and then a consensus demand plan that can used to drive the planning systems in your business.

The ultimate object of the Consensus Demand Planning process is to provide the business with the input to drive the three levels of planning; Strategic Planning, Executive Sales and Operations Planning and Master Production Scheduling. These three demand plans need to be developed from the same data, support each other and be a consensus of those with insight into the companies demand. They must not be developed separately with different groups of people or be one person or one groups thoughts on what the future holds.

If we look at the ERP planning hierarchy below you will see that the chart is divided vertically in two. The left-hand side is the demand management side, and the right-hand side is the supply management side. Supply management can’t happen until the demand has been reasonably determined. When we look at the supply side, you will see, apart from strategic planning, there are three levels of planning, Executive Sales and Operations Planning (S&OP), Master Production Scheduling (MPS) and Materials Requirements Planning (MRP). These plans drive each other and ultimately support each other. Your demand management process needs to supply input to these processes, in total to the strategic planning process, in product family aggregate to the executive S&OP process and in finished product detail to the Master Production Scheduler. The MRP process is then driven by the MPS and not customer orders and forecasts, which happens in many businesses. But that is another issue, for another day!

The S&OP and MPS plans need to be updated monthly; therefore, your demand management process also needs to be carried out monthly. And, because no planning can take place until the consensus demand plan has been agreed it therefore has to be carried out as soon as possible after month end, preferably in the first week, this will enable the Executive S&OP process to take place during the second week of the month.

Presented By

Ken Titmuss

CFPIM, CSCP, SCOR-P, CPF, CS&OP, PLS, CDDP, CSCA, CDDL, CLTD, DDPP, DDLP, AEF, CSSC, CPIA Chief Executive Officer at Kent Outsourcing Services

A successful career in supply chain necessitates a never-ending thirst for knowledge and the most up-to-date supply chain skills and knowledge. Even though continuing education and certification programs can take time and money, they help get your specialized knowledge or skills recognized.

When professionals have training that other professionals lack, it distinguishes them and sets them apart from the crowd. Certification and master classes show that the professionals are committed to learning, excelling, and using best practices.

Featured Certification Programs

Certified Stores and Stock Controller (CSSC)

Certified Production and Inventory Analyst (CPIA)

Featured Mini-Master Classes

Supply Chain Framework and Strategy

Collaboration among Sustainability, Procurement and Supply Chain

Implementing 3PL and 4PL Strategies in the Value Chain

Supply Chain Sustainability with Circularity to Drive Profitability


Commenting has been turned off.
bottom of page