• Advertise
  • Contact Us
  • About Us
  • Supplier Directory
  • Login
  • Subscribe
  • Logout
  • My Profile

  • CORONAVIRUS
  • LOGISTICS
    • Air Cargo
    • All Logistics
    • Express/Small Shipments
    • Facility Location Planning
    • Freight Forwarding/Customs Brokerage
    • Global Gateways
    • Global Logistics
    • Last Mile Delivery
    • Logistics Outsourcing
    • LTL/Truckload Services
    • Ocean Transportation
    • Rail & Intermodal
    • Reverse Logistics
    • Service Parts Management
    • Transportation & Distribution
  • TECHNOLOGY
    • All Technology
    • Artificial Intelligence
    • Cloud & On-Demand Systems
    • Data Management (Big Data/IoT/Blockchain)
    • ERP & Enterprise Systems
    • Forecasting & Demand Planning
    • Global Trade Management
    • Inventory Planning/ Optimization
    • Product Lifecycle Management
    • Sales & Operations Planning
    • SC Finance & Revenue Management
    • SC Planning & Optimization
    • Sourcing/Procurement/SRM
    • Supply Chain Visibility
    • Transportation Management
  • GENERAL SCM
    • Business Strategy Alignment
    • Education & Professional Development
    • Global Supply Chain Management
    • Global Trade & Economics
    • HR & Labor Management
    • Quality & Metrics
    • Regulation & Compliance
    • SC Security & Risk Mgmt
    • Sustainability & Corporate Social Responsibility
  • WAREHOUSING
    • All Warehouse Services
    • Conveyors & Sortation
    • Lift Trucks & AGVs
    • Order Fulfillment
    • Packaging
    • RFID, Barcode, Mobility & Voice
    • Robotics
    • Warehouse Management Systems
  • INDUSTRIES
    • Aerospace & Defense
    • Apparel
    • Automotive
    • Chemicals & Energy
    • Consumer Packaged Goods
    • E-Commerce/Omni-Channel
    • Food & Beverage
    • Healthcare
    • High-Tech/Electronics
    • Industrial Manufacturing
    • Pharmaceutical/Biotech
    • Retail
  • REGIONS
    • Asia Pacific
    • Canada
    • China
    • Europe
    • Latin America
    • Middle East/Africa
    • North America
  • THINK TANK
  • WEBINARS
  • PODCASTS
  • VIDEOS
  • WHITEPAPERS
Home » Is Demand Planning the Most Misunderstood and Unappreciated Application, Ever?

Is Demand Planning the Most Misunderstood and Unappreciated Application, Ever?

February 24, 2015
SupplyChainBrain

Demand volatility is increasing, and for many the implementation of a demand planning system might sound like the right answer. If this is you, I would urge caution. The reason why is simple. Demand planning is implemented in 85 percent of companies greater than $500m, and usually the answer is not a new system, but learning how to use the current system that is installed. The issues are many but there are five likely root issues: a badly installed initial implementation, the lack of annual tuning of the algorithms, poor planning master data, turnover of employees, and the lack of understanding of the executive team on how to manage a demand management process. Getting good at demand planning requires constant attention with skilled resources. It also requires learning how to use the output. The experienced demand planner knows that it is not the accuracy of the absolute number, but the probability of demand that is important.

The demand planning role has changed greatly in the last decade. It is no longer an entry level job with entry level pay. Instead, it requires deep analytical skills and a progressive career path. People that are good at demand planning understand the market and how to use analytics. It is not something that can be effectively modeled on a spreadsheet. The average company has two demand planning instances and plans on a monthly basis. Today, there is a talent shortage. There are more open positions than there are demand planners with many companies searching four to five months to fill a position.

Many of the demand planning systems suffer from a lack of a good implementation. In fact, there is greater variety in how demand planning systems are implemented than the demand planning technologies themselves.

The market has consolidated and the differences between the technologies is smaller now than a decade ago. As a result, most companies struggle to tell the difference between demand planning systems after a long and lengthy evaluation process. So, as you talk about the gap in demand satisfaction, ask yourself if you could be the problem.

Augmenting traditional demand planning solutions are the newer technologies of demand sensing and demand translation. Demand sensing (the replacement of rules-based-consumption logic with statistics) is currently deployed at 30 companies worldwide. The concepts are still evolving, but the average return on investment is high with an 11- to 13-percent inventory reduction and a 20- to 30-percent improvement in distribution center accuracy. 

                                                          The Outlook

Demand planning technologies are often over-hyped and poorly implemented. Most of the time, it is more important to get the organization right to drive success than select the perfect technology. Most companies focus a long time on the selection and don’t spend enough time working through the career path issues and training for employees. If this gap is closed, more companies would be happier with demand planning solutions.

RELATED CONTENT

RELATED VIDEOS

Technology Forecasting & Demand Planning Global Supply Chain Management Quality & Metrics Pharmaceutical/Biotech
KEYWORDS big data analytics Demand Volatility Forecasting & Demand Planning forecasting accuracy founder Global Supply Chain Management Lora Cecere metrics Pharmaceutical/Biotech probability of demand Quality & Metrics Supply Chain Analysis & Consulting Supply Chain Insights supply chain IT supply chain management: forecasting and demand planning Technology
  • Related Articles

    Infor Releases New Version of Demand Planning Application

    Managing Demand Is No. 1 Priority for Most Companies, Regardless of Sector

    Infor Releases New Version of Demand-Planning Application

SupplyChainBrain

100 Great Supply Chain Partners Issue 2009

More from this author

Wake up to Coronavirus Updates and the latest Supply Chain News!

Subscribe to our Daily Newsletter

Timely, incisive articles delivered directly to your inbox.

Popular Stories

  • Coronavirus-watch-Armada

    Virus Update: J&J Pause Could Last Several Weeks; Global Vaccine Production Nears 2 Billion

    Coronavirus
  • Shipping Costs

    Higher Shipping Costs Are Here to Stay, Sparking Price Increases

    Coronavirus
  • Ocado

    Kroger Is Amassing a Robot Army to Battle Amazon, Walmart

    Logistics
  • Shipping Logjam

    Reducing Supply-Chain Disruptions Through Integrated Logistics

    Coronavirus
  • Indoor Farm

    Vertical Farming: A Solution to Waste and Inefficiency in the Food Supply Chain?

    Sustainability & Corporate Social Responsibility

Digital Edition

Scb feb 2021 lg

2021 Supply Chain Management Resource Guide

VIEW THE LATEST ISSUE

Case Studies

  • Remote Implementation: A Dose of the Right Medicine for B2B Pharmacy

  • LSP Saves Customer $1.5 Million a Year With MPO Global Inbound Management

  • Auto Supplier Wows Key Client Using riskmethods Supply Chain Savvy

  • Integrating Shipping and Compliance Saves Conglomerate Millions

  • How a Consumer Goods Giant Upped Its On-Time Delivery Performance

Visit Our Sponsors

Yang Ming 6 River Systems ArcBest
Armada aThingz BluJay
Burris Logistics DSC Logistics DCSA (Digital Container Shipping Association)
DHL Resilience360 Flash Global Genpact
Geodis GEP GreyOrange
Honeywell Corporate Honeywell Intelligrated Infor
Inmar Kibo Commerce Kinaxis
Logility Magnitude Software MPO
Old Dominion Oliver Wight OpenSky
Paccurate Ports America Purolator
QAD Precision Red Classic Riskmethods
S&H Systems Snapfulfil TGW Systems
Tradepoint Atlantic Transportation Insights Watson Land Company
Westfalia Technologies Workjam
  • More From SCB
    • Featured Content
    • Video Library
    • Think Tank Blog
    • SupplyChainBrain Podcast
    • Whitepapers
    • Webinars
  • Digital Offerings
    • Digital Issue
    • Subscribe
    • Manage Your Subscription
    • Newsletters
  • Resources
    • Events Calendar
    • SCB's Great Supply Chain Partners
    • Supplier Directory
    • Case Study Showcase
    • Supply Chain Innovation Awards
    • 100 Great Partners Form
  • SCB Corporate
    • Advertise on SCB.COM
    • About Us
    • Privacy Policy
    • Contact Us
    • Data Sharing Opt-Out

All content copyright ©2021 Keller International Publishing Corp All rights reserved. No reproduction, transmission or display is permitted without the written permissions of Keller International Publishing Corp

Design, CMS, Hosting & Web Development :: ePublishing