Demand Management Best Practices

Demand Management relates to demand planning and describes the way in which demand is managed through forecasting and other predictive methods. It can also be used to control demand, as well as influence it.

Thorough Demand Control

Demand Control reviews the demand plan frequently to ensure that demand, inventory and purchasing plans and decisions are lining up. This accounts for sudden shifts in the demand cycle and helps the company adjust if demand is greater than supply or vice versa.

Employ a Demand Controller and a Demand Planner

Demand Planners are responsible for many decisions during the planning process and are usually focused on long-term forecasting and planning for the company. They adjust decisions based on data from various parts of the company, such as sales and supply costs. The Demand Controller focuses on shorter-term decisions. This can include when supply has exceeded demand or vice versa. Therefore, they must be involved in many aspects of the demand planning stage as well, such as sales, marketing and supply planning.

Ensure Demand Management Objectives Are Clear

These objectives should include reduction of inventory, discontinuation of unnecessary items, appropriate number of newly marketed items, keeping the customers satisfied and consistent review of the demand planning system. When these objectives are clear and defined, it helps the company run more smoothly and you can be assured the operations across the board work more efficiently and streamlined.

Review and Evaluations

It is important to include frequent reviews or evaluations. You don’t want to do too many reviews because you need time for processes to take place so there is data to analyze. However, it is important to review the forecasts and the demand process itself to see how well they are working. Doing a performance evaluation of actual demand versus revenue is also important and can be conducted at term-end or year-end.

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