demand-planning-methodologies

[demand-planning-methodologies]

Demand Planning — Forecast Reconciliation

Key process driver is forecast reconciliation and a methodology to determine and analyze exceptions. Reconciliation can often be painful. And it can be made worse by a simplistic process lacking an exceptions methodology. Identifying major variances and diagnosing the root-causes for the variance can quickly result in plan consensus.

Demand Planning Net specializes in helping businesses improve their planning across their Value Chain. We provide consulting services and solutions implementation in Demand Planning, Integrated Business Planning (IBP), Sales and Operations Planning (S&OP), and Supply Chain Optimization. 

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Demand Planning — The Business Plan

The Business Plan or the annual Budget often follows the following outline:

Strategic analysis of external factors

Economic

Political

Competitive

Internal Factors

Development of a Sales and Marketing Plan

Calendar Monthly forecast

Operating Budget

Manufacturing Costs

Administrative costs

Sales and Marketing Overheads

Capacity and other bottlenecks

Organizational Consensus

Revisions to Spend and volumes

Management buy-in

Outlining Key risks and opportunities to the Annual Budget

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Demand Planning — Annual Marketing Plan

Often the annual Marketing Plan is the driver for the demand information in the annual budget. The Marketing Plan is developed with a volume forecast for the year along with the spending levels necessary to create and sustain the expected demand for the products. Marketing-mix modeling is a key component of developing the Marketing Plan.

Demand Planning Net specializes in helping businesses improve their planning across their Value Chain. We provide consulting services and solutions implementation in Demand Planning, Integrated Business Planning (IBP), Sales and Operations Planning (S&OP), and Supply Chain Optimization. 

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Demand Planning — Longer-term forecasts

It is common knowledge that longer-term forecasts are more erroneous than short-term forecasts. There are more dynamic variables and error processes at play in determining the conditions expected to prevail in the future.

So it is also necessary to subject your forecast to a sensitivity analysis to understand the robustness of the forecast if the underlying economic and business environment changes. DemandPlanning.Net has developed a unique methodology to develop long-term forecasting and analyzing forecast sensitivity.

Demand Planning Net specializes in helping businesses improve their planning across their Value Chain. We provide consulting services and solutions implementation in Demand Planning, Integrated Business Planning (IBP), Sales and Operations Planning (S&OP), and Supply Chain Optimization. 

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[demand-planning-methodologies]

Demand Planning — Business Planning and Budgeting

Conducted as an annual exercise, the business plan is the volume, cost and profit plan for, typically, the upcoming year. This is also referred to as the annual budgeting process. Some companies conduct this as part of the long-range forecasting process, which cover anywhere from three to seven years.

Business planning is critical for every company, while long-term forecasting is indispensable for companies with longer product development cycles. The long-term plan provides the inputs for capacity planning and other long-term expansion initiatives.

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Demand Planning — Different planning methodologies

VMI, CMI, CPFR, and ABF are the different methodologies available for the manufacturer to collaborate with the customer. Which method to choose depends on the customer, the data availability, the systems infrastructure as well as the information needs of the collaboration process. These processes may be mapped out in a continuum of increasing complexity and benefits.

We can help you optimize these considerations and choose the right model of collaborative relationships.

Demand Planning Net specializes in helping businesses improve their planning across their Value Chain. We provide consulting services and solutions implementation in Demand Planning, Integrated Business Planning (IBP), Sales and Operations Planning (S&OP), and Supply Chain Optimization. 

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[demand-planning-methodologies]

Demand Planning — Planning Methodologies

Planning is an important value-added activity in the corporate value chain. While it is inevitable for any organization, certain key planning methodologies enable an organization to achieve a competitive advantage.

Business Planning is the annual exercise of generating the Budget for the upcoming year that includes the volume, cost, and profit plan for the company. The process may also incorporate developing a long-term forecast. Learn more

Promotional Planning Develop the promotional plan, model the volume impact (or lift), evaluate the ROI, and incorporate the plan into the SKU-level supply chain forecast. Learn more

Collaborative Planning is the process of planning, forecasting, and replenishing customer supply chain needs in a collaborative relationship between the supplier and the customer. Learn more

VMI & CMI (Vendor Managed Inventory) are the process of managing the customer inventory and replenishing their stores and warehouses so optimal inventory is kept in the customer supply chain. The objective is to minimize stock-outs and costly production stoppages. The Co-managed Inventory Process is similar but more popular in the Manufacturer to Retailer model. Learn more

Account Based Forecasting (ABF) integrates the customer-specific collaborative plan into the national forecast and delivers an accurate SKU-level plan to production. The customer breakdown in the forecast can be leveraged to optimize inventories and service levels. Learn more

S&OP (Sales and Operations Planning) process helps the entire company to develop, understand and use a consensus forecast for operational Planning and enables a forum for understanding operational constraints and resolution to arrive at the agreed-upon operational Plan. Learn more

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