Objectives and Output of The Demand Management Process?
The primary objective of the demand management process is to provide the business with a reasonable demand plan with which to drive the business planning processes. This will assist the company to better plan investment strategy, plan new resources and plant into the future and plan the procurement for long lead-time materials, timeously.
These three demand plans need to be derived from the same data, support each other and be a consensus of those with insight into the business. These plans can’t be developed independently by different people or teams in the organisation or be one persons or groups thoughts on what is going to happen into the future. When the demand plan is proved to be wrong, which it will be, we don’t want to blame a person or group. Instead, we ask the question “why?” and file the answer away in our ‘knowledge bank’ and change the process to improve the accuracy of the output.
The Demand Management Process
Demand management is the process of gaining a reasonable grasp of all the demands on the business. This process needs to be the responsibility of the demand team which should consist of at least the following functions:
01. Demand manager
More and more companies are employing people in this functional area and they would drive this process.
02. Marketing manager
They have information with regards to new customers and products.
03. Sales Manager
This function has ‘up-to-date’ information on current customers and products out in the market place.
04. The Master Scheduler
The more this function can understand about demand on the business, the better their MPS supply plan can be constructed.
05. Teams engaging with Externally Drives
Anybody that has insight into what externally drives the business that you have absolutely no control over.
The demand management process consists of four basic steps:
The quantitative statistical forecast
Forecast collaboration with the customer
The qualitative forecasting process
Creating the demand plans for the three basic planning processes.
Step one is for the demand manager to prepare the detailed statistical forecasts using computerised tools. These are then communicated to the sales team for collaboration with the customers. These collaborated forecasts are then fed back to the demand team for the qualitative forecasting process and the creation of the three demand plans for the planning processes.
CFPIM, CSCP, SCOR-P, CPF, CS&OP, PLS, CDDP, CSCA, CDDL, CLTD, DDPP, DDLP, AEF, CSSC, CPIA Chief Executive Officer at Kent Outsourcing Services
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