Demand planning is a multiple step operational supply chain management approach used to create forecasts. Successful demand planning can help companies increase the accuracy of revenue forecasts, manage inventory levels and increase profitability.
Demand planning is an important part of managing value changes. Generally, the first step in customer demand planning is to forecast product demand. Customer demand planning is a bottom-up method, opposed to than top down planning.
- Improves the accuracy of product forecasting
- Increases scheduling of the supply chain
- Efficiently manages labor
- Offers effective management of can flow
Demand planning done successfully is exceedingly precise and increases profitability. It is advantageous to discover where your organization is going and to take steps to meet financial and operational demand. Organizations often utilize demand planning to report to financial institutions and other stake holders. Sales use demand planning to generate benchmarks and allot resources. Operations use demand planning to purchase and ship items, schedule production and establish inventory procedures.