4 Steps That Are Essential to Demand Planning

You may have learned about demand planning and what it entails. This article will review a few of the essential steps that all businesses can take to ensure their demand planning processes are benefiting the company as a whole.

1. Develop a Range of Demand Planning Forecasts

By now, your core group has already agreed upon a set of assumptions. If the group hasn’t, make sure to revert to the previous post we made on the essential steps for demand planning.

Once you have a set of assumptions that the core group has agreed upon, you can then generate responsive time periods followed then by producing a range of demand planning forecasts. The goal of this is to ensure the modeling solution you have for demand planning can be recalculated in real-time as needed. The better you get at being able to recalculate in real-time, the more accurate your overall demand planning can be.

The range of demand planning that you leverage to create forecasts is going to be based very specifically on the product or service that you sell. You cannot use the same forecasting techniques for all products and services, though. This is why it’s so important to always create unique forecasting for each and every product or service that you offer.

2. Create Models That Preclude Delays

You should always create forecasting models that preclude days; this is to help ensure that you are able to shorten your renewal cycles. More importantly, this will help with forecasting and comparing stock of certain products across different locations.

It also helps with generating reports that apply to every location where a product is sold. Imagine being able to accurately predict which stores and locations will sell how much of each product or service. In doing this, you can get much better at allocating your resources appropriately and more efficiently.

3. Use a Variety of Demand Forecasting Methods

Even though modeling for forecasting is usually based on purchasing intentions, an essential step to demand planning is to make sure there aren’t any other modeling solutions that can be applied. It is very true that different methodologies can be used to accurately forecast demand levels, and this is particularly seen in industries that don’t deal with commodities.

This is why it’s so important to study your industry and to see which methodologies your competitors have had luck with when it comes to forecasting future demand levels.

4. Always Give the Demand Forecast a Reality Check

Lastly, you must make sure that the core group is continuously conducting processes that give it a reality check. This is to ensure that despite the quantitative and qualitative data that becomes available, that the proper resources and steps are being used to predict future demand levels.

You can easily do reality-checks by comparing your demand forecasts against those of your competitors. Just remember, the better you get at predicting accurate demand levels for your services and products, the easier it becomes to offer them at a price level that beats your competitors.