Customer demand planning is a significant part of managing value changes. Typically, the initial step in customer demand planning is to forecast product demand. Organizations can plan the use of resources in agreement with the resulting forecasts. Customer demand planning is a bottom-up method vs. top down planning.
Demand planning’s multi-step operational supply chain management approach is utilized to create forecasts. Successful demand planning can steer organizations to increase the accuracy of revenue forecasts, manage inventory levels and increase profitability.
Demand planning utilizes analytics that look at past sales data, consumer offers, shipments, sales and market indicators to help foretell demand patters based on industry changes. It enables organizations to make savvy decisions on inventory and levels of production.
Demand planning that is done properly is extremely accurate and increases profitability. It is useful to see where your organization is going and to take actions to meet demand financially and operationally. Top level executives often use demand planning to communicate to financial institutions and other stake holders. Sales use demand planning to establish benchmarks and allocate resources. Operations use it to buy and ship items, schedule production and establish inventory procedures.