Introduction
Demand management is the supply chain management process that balances and satisfies the customer requirements with supply chain capabilities. Management can match supply and demand proactively and execute the plan with minimal disruptions if the proper technique is in place. Forecasting is only one aspect of the process.
It entails aligning supply and demand, increasing flexibility, and decreasing variability. We describe the demand management software process in detail in this paper to demonstrate how it can be implemented within a company and managed across firms in the supply chain. We examine each subprocess’s activities, assess the interfaces with corporate functions, processes, and firms, and provide examples of successful implementation.
What is demand management in supply chain?
Demand management is a method of planning. It is used by businesses to forecast and plan how to meet the demand for services and products. Demand management strengthens the links between operations and marketing leading to customer needs are better coordinated.
According to research published in the Global Journal of Management and Business in 2023 demand management “provides an important bridge between the marketplace and a company’s internal operations.
Those conclusions are still relevant today. Modern demand management software identifies and captures all potential demands, interprets them, and communicates them to the appropriate organizational departments. An assessment based on customer inquiries or booked orders is an example of external demand, whereas an internal demand assessment may calculate the raw materials required to produce a new product and the promotional activities needed to support its launch.
Demand management’s role in the organization
Demand management encompasses various activities, including inventory level and planning, trade and promotion planning, and customer service.
Demand management is a process that aids in managing the supply chain (SCM). Management of an organization’s sourcing, development, manufacturing, and delivery activities, including the movement of materials, services, and goods from suppliers, is referred to as supply chain management. The supply chain is a complex, interconnected system that allows businesses to build and market products. A company may be a vital link in other companies’ supply chains.
What is the intention of demand management?
Demand management develops a strategy to meet current and anticipated market conditions. Marketing and demand planning benefit from the process’s data and insights. Production and sales forecasting teams to assist them in meeting company objectives.
Demand management objectives
Today’s successful demand management teams are customer-centric — it all comes down to predicting and meeting demand with the right products and services. Improved customer service, more accurate forecasting and lower costs are among the specific areas of focus.
Customer-centric demand management has the following specific goals:
Increased customer satisfaction and service: Understanding client needs and behaviors increases customer satisfaction and service.
Forecasting with greater precision: Predictive analytics efforts optimize business leaders’ decisions and improve supply chain management.
Cost savings: better forecasting optimizes inventory investments and can reduce safety stock levels.
Improve existing products while excelling at new product introductions: Create a line of customer-friendly new products and iterate on them based on feedback.
Planning that is more efficient: Using reliable data, strike the right balance of demand and supply and minimize surpluses.
Who makes use of demand management?
Demand management software is used in almost every department and division, either directly or indirectly. Demand management forecasts future needs so that all business areas can operate efficiently and without overburdening systems.
Demand management users include marketing, sales, finance, R&D, manufacturing, quality control, and logistics. The demand management data from those departments affects order fulfillment, customer service, customer relationship management, manufacturing flow management, procurement, and product development and commercialization.
How would you oversee request the board?
The interest in the executive’s cycle works best as a collaboration, aiming to comprehend supply issues better. In more prominent firms, an interesting director supervises the process. Members should incorporate new item advancement, deals, and promoting and creation schedulers.
The best way to care for the board’s interest is to send incorporated, examination-driven processes. Effective organizations influence prescient examination, market knowledge, and top-tier advances to accomplish income development objectives and targets.
How do you deal with demand management?
The demand management process works best as a collaborative effort to understand supply issues better. A demand manager oversees the process in larger firms. Participants should include those responsible for new product development, sales and marketing, and production scheduling.
Implementing integrated, analytics-driven processes is the most efficient way to manage demand. Successful businesses use predictive analytics, market intelligence, and best-in-class technologies to achieve revenue growth goals and objectives.
Demand management goes beyond forecasting and includes the techniques discussed earlier in this article, such as demand sensing and shaping. Demand managers can continuously shape demand using key performance indicators (KPIs) and metrics analysis.
Data sharing enables high supply chain visibility (SCV), another essential demand management strategy. When order fulfillment issues or low inventory levels threaten the ability to demand, supply chain visibility alerts schedulers and planners.
The benefits of demand management
Consistently applying demand management principles results in a series of interconnected improvements. The benefits are improved forecasting, a more confident sales force, and better labor management.
Other benefits of best demand management software include:
Improved forecast accuracy: Using demand sensing, point-of-sale (POS) data, big data, and data analytics, near-term forecast precision is improved.
Improved product forecasting: Effective demand management enables supply chain managers to make more accurate production forecasts based on reliable data.
Improved supply chain scheduling and operations: Companies can optimize production, shipping, and warehouse operations with more precise analysis and forecasting.
Salesforce confidence: Strong demand management instills confidence in sales team members about the company’s ability to deliver products and services.
Organizational agility: The ability to respond to and adapt to change in the environment and within the company allows you to manage more effectively when pivoting under challenging times.
Better labor management: Predicting peak demand allows businesses to plan staffing levels accurately.
Enhanced competitive advantage: Companies gain an advantage by eliminating waste and increasing value in all areas of the supply chain by successfully anticipating and planning demand and integrating business processes.
Demand management obstacles
Consumer pull is frequently involved in demand management challenges. Customers want more, and they want it now. Many expect instant responses and same-day delivery. Business leaders must adapt to deal with more frequent peaks and valleys in consumer demand.
Other difficulties in transitioning to next-generation demand management include:
Customers who are far away: You must maintain a balancing act for sales and collaborate with retailers on demand modeling to determine the best timing, level, and location for promotions. Co-planning with customers, especially those who account for most of your business, helps to reduce demand volatility.
Lack of POS data: Because POS data is the closest many businesses get to accurate, real-time demand information, it makes sense to receive, store, and use it in customer co-planning efforts. It can provide early warning signs of impending demand shifts and assist suppliers and their direct customers in keeping them happy.
Manufacturers may continue to rely on a single supplier for components or materials: This approach is fraught with danger because supplier failure is likely to result in a loss in meeting customer demand.
Rapid change: To stay ahead in an accelerating and complex business environment, companies that want to lead must improve their forecast accuracy and be prepared to pivot to manage demand if a forecast is incorrect.
