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FAQs (Frequently Asked Questions) On Demand Planning

FAQs (Frequently Asked Questions) On Demand Planning

Following are some of the frequently asked questions (FAQs) on Demand Planning that we have encountered in our speeches, workshops, seminars, and other forums.  Feel free to ask more questions if your particular question is not answered below.

Table of Contents

Why we are qualified to write this list of FAQs on Demand Planning?

VERY FEW PEOPLE KNOW SUPPLY CHAINS LIKE WE DO - retail, beverages, food, milk, dairy, meat, livestock, explosives, chemicals, cotton, rice, graphite, solar power, natural gas, crude oil, fertilizers, electronics, packaging, glass manufacturing, machine parts, automobiles, industrial goods, mining, etc are just some of the industries where boards and executives have benefited from our proprietary knowledge of the supply chains. 

Click on our project methodology above to see how Demand Planning is an integral step in each and every project that we have undertaken in the last three decades.

Since when no one had heard of supply chain, our co-founder Vivek Sood has been considered one of the most authoritative professionals in the field when it comes to the subject of supply chain analytics in Australia, Asia, North America, South America and Europe.

 He has written four seminal books about restructuring supply chains to gain massive advantage in business. He also regularly delivers keynote speeches at business schools and conferences such as University of Technology Sydney, Supply Chain Asia, Asian Bankers Forum, APEC Business Advisory Council.

He has been quoted in the authoritative business press and over 100 academic papers written by supply chain researchers around the world. Vivek and his team have examined thousands of supply chains during their projects over the last three decades and helped hundreds of executives build safe, cost effective and sustainable supply chains and careers. 

FAQs (Frequently Asked Questions)

on Demand Planning

What is demand planning, and why is so important in supply chain management?

Demand planning in the supply chain management process of forecasting demand so that reliable product delivery is achieved and consumers are always pleased. Efficient demand planning will generate accurate revenue forecasts, adjust the inventory levels with variations in demand, and upscale the profitability for a particular channel or product.

The market is volatile and uncertain, and demand plans need to move at the speed of the changing market. Suppose the people who design the demand plans are not able to be adjusted with agility. In that case, companies could end up with stock-outs and unhappy customers, or warehouses full of unused inventory, low finance managers, and millions of dollars in wasted capital.

In an ideal environment, demand developers must be updated about the market instead of softly reacting to it, and decisions based on near real-time market data are also made, rather than relying mostly on historical data. It is a challenging task on systems, but with the effective use of cloud-based planning platforms, it had already become more approachable.

What are the benefits of demand planning?

Demand planning enables companies to be more proactive. It puts them in a better position to avoid last-minute, costly surprises. Improved demand planning provides countless benefits, including:

  • Lower costs of inventory: By updated planning and staying ahead of the market the inventory costs are reduced
  • Reduction in stock-outs: By the help of accurate forecasting and employing effective replenishment method, the crisis of being out of stock will get reduced considerably.
  • Reduced waste: Excessive inventory is waste, and it will reduce the space and also increase the Cost of scraping and recycling. By the accurate planning and order, only the sufficient amount of inventory will get placed, thus decreasing the wastage.
  • Increase the on-time delivery status: By strictly and closely following through the rigid plans, the ETA of product delivery made consistent with meeting the deadlines.
  • Reduction in expedited shipping fees: By good forecasting and selecting the most feasible roots, the shipping charges are brought to a minimum.
  • Better negotiations with suppliers: By moving ahead of the market with clearly drawn plans about the demand, the negotiation with supplier become more smooth.

What are the basic and advanced skills that today's demand planers need?

Today's Demand planning is being subjected to exponential radical change with an underlying on digital conversion. Deep learning systems AI and  ML have already started to make changes to the operation of the demand planners.

The deep learning and automation prospects of big data, blockchain, robotics, and 3D printing may soon be the rule rather than the exception. Demand planning of the future will be always-on, dynamic, and volatile. The quick reaction times and the ability to make value-based decisions are necessary to stay updated in the field.

To make transformations the demand planners must combine technical and business knowledge with communication skills. The influencing power over the department that partners with demand planning are a crucial function.

Also, the skills to interact confidently with the leaders across the organisation is essential because supply chain initiatives often reach across business units. Strong business acumen is a must-have, so you'll be more effective in working with your counterparts in all the branches of the organisation.

The significant demand planning leader of tomorrow will be tech enthusiastic and comfortable working alongside the advanced technologies. However, managers who work with AI will replace managers who don't. It points out the transformation taking place in SCM "Humanity is important, but so is technology". The new demand planning leader is tech-savvy and also skilled in managing the workforce.

To thrive in this changing world, demand planning professionals must update their capacities in collaboration, communication, and leadership.

Also, they need to pair those skills along with advanced technical knowledge is required to become a powerful force in demand planning.

What are the features of Demand Planning?

Demand planning contains three essential features which are :

  • Product Portfolio Management
  • Statistical Forecasting
  • Trade Promotion Management

What is meant by Product Portfolio Management?

Product portfolio management oversees the overall product lifecycle, beginning with the introduction of a new product through to its end-of-life planning. In most cases, the product lines are interdependent.

Understanding how recent developments may influence demand for other products is vital to understanding the overall product mix required to maximize market share.

What is meant by Statistical Forecasting?

By the usage of historical data, statistical forecasting creates supply chain forecasts with advanced statistical algorithms. In this area, it is essential to determine the accuracy of each model, identify outliers and exclusions and understand assumptions. Seasonal shifts can also be assessed with statistical forecasting.

What is meant by Trade Promotion Management?

Trade promotion or marketing events can influence demand, especially in the retail industry. The goal of trade promotion is to help a brand connect with a customer, often through an in-store giveaway, discount, or advertising, and these events can impact the demand for a product.

What are the steps that we must follow in demand Planning?

When you implement demand planning, it's essential to take a few critical steps to ensure success:

  • Be inclusive of exposing strengths, opportunities and risks.

To integrate a successful demand planning process, be sure to include all the right players. It means collaborating with all the functioning parts of the business that impact demand and supply. Inside out, demand planning is an excellent way to highlight risks, strengths and opportunities for the rapid growth. As an example, an unconstrained demand plan may surface the need to expand capacity to meet the increased demand for your products. Conversely, it may expose underutilized resources which can then trigger the need to increase marketing investments.

  • Get the appropriate software.

Planners using dedicated demand planning tools will execute more tasks than those using just spreadsheets. Updated demand planning systems allow companies to process large data volume of data by making effective use of sophisticated algorithms.

  • Focus on perennial improvement to keep demand and supply in sync.

Planning technology is vital but will only improve operations if data collection is repeatedly analysed. Successful demand developers continually evaluated the variance between forecasts and the observed sales to fine-tune their forecasts and safety stock levels.

What are the benefits of demand fulfilment?

New demand fulfilment tools will influence the supply process and revenue


  • Typical standard features of an order management tools are:
  • Generate new business, new revenues
  • Achieve unmatched levels of customer service
  • Reduce operations costs
  • 24 x 7 visibility
  • Intelligent exception tracking, alerting / escalations
  • Leverage current staff, systems, and skills
  • No disturbance to other parts of systems
  • Key Performance Indicators/dashboards
  • Save staff time

How must the selection of software and service providers in demand planning be carried out?

The key factors to be followed during the selection of software and service providers in demand planning are as follows :

  • Real-Time Monitoring
  • Knowledge Sharing Networks
  • Collaboration
  • AI and Machine Learning
  • Cloud Solutions
  • Cost
  • Modes of deployment
  • Available platforms
  • Company suitability

What is the role of Real-Time Monitoring in the selection of  Software in demand planning?

Real-Time Monitoring: Today's supply chain is a complex soup of web of technology, processes and workforce. And at its apex point, a never-ending flow of data acts as the engine.

In this situation, the real-time monitoring plays a key role by providing context for the data. It gives accurate insight into things like quality and performance while revealing crisis areas. This visibility helps upscale the business.

What is the role of Knowledge Sharing Networks in the selection of Software in demand planning?

Knowledge Sharing Networks: Knowledge-sharing networks are the outcomes of integrations across BI, advanced supply chain analytics, tracking-tracing applications with quality management. It creates a platform that allows supplier connection, along with more peak speed and increased scalability.

What is the role of collaboration in the selection of  Software in demand planning?

Collaboration: The amount of data at our custody importance of cooperation across all aspects of the supply chain. Data reliability and accuracy are essential factors. But to scale down the costs and waste while updating the results, organisations also rely on data that provides only single solutions, and that can be shared freely.

For optimum effectiveness, the collaboration should involve every department across an organisation, along with channel partners.

What is the role of AI and Machine Learning in the selection of  Software in demand planning?

AI and Machine Learning: AI has already become a common sight. But along with machine learning, the AI has yet to receive widespread adoption in the SCM.

With the given the abilities AI and deep learning algorithms like  machine learning present:

  • Circumstantial intelligence, which cuts costs and inventory while upscaling response times, Improving related operations.
  • Predicting warehouse order arrivals and departures
  • Insights into SCM performance
  • 360-degree view of the supply chain

What is the role of Cloud Solutions in the selection of  Software in demand planning?

Cloud Solutions: The entire supply chain cloud systems are designed for greater use moving forward.

Another factor is globalisation. With international supply chains to manage, companies need more manageable, more effective ways of standardising processes. Cloud solutions are a practical answer.

What is the role of Cost in the selection of  Software in demand planning?

Cost: The Cost of the system should fit between the budget lines of your project yielding better revenue.

What is the role of Modes of deployment in the selection of Software in demand planning?

Modes of deployment: This software can be deployed in different methods such as by using a cloud-based system for better handling of data or using a dedicated server base for better security. We must select the software according to our needs that are in place.

What is the role of Available platforms in the selection of Software in demand planning?

Available platforms: There are mostly Mac, Windows and Linux operating systems that are in place. Most of the software is compatible to work all of these operating systems, but some of them are not. We must select the software according to the existing OS in the company.

What is the role of Company suitability in the selection of Software in demand planning?

Company suitability: This software are built for different scales of the company ranging from small to large, and some of the software is universal and can be applied to many levels.

So the selection must be suitable for your company level.

Sink of swim Report: how information technology can save or ruin supply chains

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Notes on FAQs

Clearly, any such list of frequently asked questions (FAQs) about supply chain can never be fully exhaustive. Neither is anyone, including us, the final authority and arbitrator on this or any other topic. 

You will have your own opinions on many of these topics, and will have many other questions. 

We throw open the comments section to you for your opinions and questions. We will try to address all of these, and the best ones will attract a reward in the form of one of our books, or publications. 

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