One of the main goals of every Supply Chain today is balancing efficiency, resilience and agility. Enterprises need to seamlessly optimize these three challenges for effective customer service. By doing so, companies have the ability to stay competitive in an uncertain and constantly changing world.
Accurate forecasting models become ever more critical to meet customer demand as companies add more product lines and the value chain expands. That’s why having the most accurate forecasts to have a successful demand plan in place is a must for every company.
So far, we’ve explored what Demand Planning is, delved into its key features, and reviewed the functions and duties to this process. And we know that the strategic process of Demand Planning serves as the bridge between commerce and the supply chain. Therefore, questions about defined roles and responsibilities come as no surprise.
Now, let’s deep dive into the key steps of the demand planner function. What should the role of demand planners in demand planning play within your supply chain?
The Role of Demand Planners
Demand planners streamline the journey to the demand plan by extracting insights from various data points and sources. They also solicit input from different stakeholders. This grants them the authority to own the process — as they should — but not the actual numbers. Given all the information they manage, they must keep a critical mindset and challenge assumptions to get to the best plan.
The demand planning function serves a critical role as the liaison between the business and operational sides of the business. They are the translators of the sales plan into the forecast that will serve as the foundation for production, distribution and procurement planning.
What Should Their Duties Include?
The responsibilities of demand planners include inventory flow/upstream management, analyzing data and generating forecasts. Below you will find some more detail on each one of them.
Inventory flow/upstream management
To start, demand planners should always have a view of the inventory flow in the first place. Understanding the factors that drive the forecast requires effective management of sales, marketing, finance, sourcing and manufacturing teams.
Analyzing data
Another essential aspect for demand planners is the ability to analyze historical data. By doing this, they are capable of ensuring the company’s future operations are timely, efficient and cost-effective.
This analytical process includes the examination of financial forecasts, reporting and key performance indicators (KPIs) related to inventory.
Generating one number forecasts
Once demand planners analyze the data, they can generate a forecasted demand estimation. In particular, they have the ability to create a “one number forecast”.
But, what is this type of forecast? In the future, different parts of the organization can make many plans and decisions.
In the end, demand planners take different points of data to create the number one forecast. This data includes:
- Global account forecasts
- Retailer data
- Formal gap closer
- Monthly consensus meetings
- Frequent S&OP meetings to review operations
Mitigating Risk
The responsibilities of demand planners listed above contribute to orchestrating a seamless and responsive supply chain. Reviewing the upstream/downstream data and forecasting helps to identify and mitigate risk of daily operating decisions. This also ensures your supply chain is compliant with the demand planning model, keeping your business running smoothly and providing the opportunity for further achievements.
Ultimately, we can conclude that it falls on demand planners to set strategic objectives, prioritize tasks to achieve these, and harmonize the business plan with the supply chain goals to devise the most precise and least risky strategy. The journey to an agile supply chain begins with demand planning.
Want to know more about Demand Planning? Check out other valuable resources:
- What is Demand Planning?
- The Demand Planning Cycle
- Why is Demand Planning important?
- Roles and Responsibilities of Demand Planning
- Demand Planning Key Features
- What is a Collaboration and Demand Review?
- QAD Announces the Next Release of Digital Supply Chain Planning (DSCP)
- Harnessing Artificial Intelligence in New Era of Predictive Analytics, Demand
- Planning, Business Forecasting
- Extending Sales and Operations Planning Throughout the Supply Chain
