Demand planning is a multi-step operational supply chain management process used to construct reliable forecasts. Successful demand planning can steer users to improve the accuracy of revenue forecasts, align inventory levels and enhance profitability for a given channel or product.
Demand planning contributes to the evolution of a forecast that reflects known hurdles and any possible associated impacts that may take place as a result of external events, capacity or changing priorities.
Demand planning involves implementing statistical analysis, best practices, and past and current demand cycles to evaluate future customer demand. It also serves as an input to capacity planning to provision required IT resources based on current and expected future demand.
- Improved forecasting accuracy and planning cycle time
- Increased customer satisfaction through improved inventory availability
- Increased effectiveness of pricing and promotions
Effective demand planning can assist the whole organization work together to close performance gaps and meet financial goals.