Demand Planning And Forecasting3/17/2021
She received her Doctor of Business Administration from the University of Phoenix.We want to ensure product availability to maximize revenues in the marketplace but also know inventory is a tradeoff as it ties up capital.
Effective demand planning then requires a variety of information (timely, as accurate as possible, useable, qualitative and quantitative) in order to properly forecast the products we sell. For any given product, there may be independent demand, dependent demand, interintra plant demand, and service parts demand. We are usually forecasting independent and possibly service parts demand but all types of demand have to be planned for in our supply chain processes to ensure availability when needed. In general, the more we know about the demand for our products, the better our forecasts will be. For example, the bullwhip effect creates demand volatility that becomes amplified as it moves through the supply chain. While this can be a big problem, it is also an opportunity for collaboration and information sharing, two ways to ensure a better understanding of what your demand really is. In general, who is responsible for the forecasts, what are our products, where are they in their product lifecycle, what is their demand pattern, do we understand the variabilityvolatility seen in the marketplace, and who is providing the additional information required to ensure an appropriate forecast Of course, depending on the individual company, there may be additional questions that need to be answered. While the company may or may not view this as a problem, the demand planning process can aid in understanding what the inventory goals should be and why, as well as what an appropriate forecast should be through ongoing analysis and tracking of the forecast. They must be integrated into other aspects of operations in order to provide value. The Institute of Business Forecasting defines SOP as a process that integrates demand, supply, and financial planning into one game plan for business. It also links strategic plans to operational plans, and attempts to develop the most desirable product portfolio and product mix to maximize sales and profit. But SOP is important to more than just these areas of a company. In addition to supply chain, Tom Wallace, SOP thought leader noted, SOP is also an important aspect of Manufacturing, Finance, Sales and Marketing, RD, and top management. We still need to balance our demand with our supply capabilities. Manufacturing needs to know what product to make, the quantities to make, and the timing of when it is needed. The supply side tells us what our capacity and capabilities are to ensure these needs can be met. Understanding those capabilities allows us to shape our demand to more closely match our supply. So, we need to understand the potential issues and relay the subsequent information to other parties within the company. Incorporating a better understanding of the demand for our products, as well as improved demand planning and forecasting, will provide better inputs into the SOP process as we move forward. She graduated from the University of North Carolina at Greensboro with an undergraduate degree in Information Systems and Operations Management and a Masters in Business Administration.
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