Demand planning

Demand Planning as initiator of S&OP

  • In many companies, each planning cycle starts with the review of the efficiency of the previous demand plan and the generation of the next one. Subsequently, a supply and capacity plan is determined in order to balance demand in the best possible way. As resources are scarce and expensive, it is vital to obtain a high quality & trustworthy demand plan that is agreed on by all parties involved.

    Demand Planning, when it is correctly carried out, can provide a true competitive edge. It can be a tool to improve the best-in-class customer service while managing inventory.

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The preconfigured SAP APO DP solution created by DOWAP is based on the SAP APO DP module that was modeled to be a ready-to-use solution for any company. It is designed and built based on best-practice methods, as supported and instructed by APICS. It is also a result of the many years of experience that the DOWAP team acquired in Supply Chain Planning through projects implementation around Europe.

The strong technical & integration aspects of SAP are used in support of this standardized Demand Planning process, hence our simple, straight-forward and user-friendly solution. Thus, it avoids wasting time and money on understanding the technical pitfalls of the system but it enables to concentrate purely on the value added activity of getting the Demand Plan itself in the right shape. 

The never-ending challenges of a Demand Planner

 

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  • Demand Planning is all about leveraging the input of information coming from different teams within any organization. On one side, the marketing team must have a view on how well their actions will do. The sales team has other incentives to trust their promotional volumes. Customer Service will want to make sure all possible orders get covered. On the other side, the warehouse management will want to avoid too many stocks. The Demand Planner will get input from all teams which makes the creation of an independent demand plan very challenging.

    In that sense, the Demand Planner should rather be called a Demand Manager as his/her activities include Demand Sensing i.e. to perceive and to translate the signals of the market, and Demand Shaping i.e. to optimize sales and profit. And assuming the ideal Demand Planner playing all this roles, at the end, the final number they come up with will never be 100% correct…

The main objective of our solution, however, is to create a plan considering all inputs that build up to the total demand without taking into account any restrictions that are due to limitations in supply or capacity. Therefore a flexible tool is required that shows the right info in an organized and concise manner and helps the planners in their cyclical process to come up with the one and only final number that is agreed on and trusted by all teams.

The Demand Planning Process

 

To chase this objective, a high level demand planning process is designed consisting of 5 subsequent steps:

  • 1)      Review of historical sales, orders or deliveries

    2)      Generation of forecast

    3)      Incorporation of event data

    4)      Forecast review

    5)      Exception Management

    The preconfigured solution offers a set of planning tables that logically orders the transactional data to support this process in order to minimize navigation and to be able to do the maximum amount of activities within one single screen.

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Key Points

  • forecast

    Statistical tools for forecast generation

    The demand planner will need to understand the sales patterns of the set of products he is planning. For this purpose, statistical tools are a great help…

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  • cycle

    Life Cycle Management

    An additional challenge is the management of the life cycle of every single product. Innovation plays an increasingly important role especially if we want to keep our customers happy…

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    Flexible Planning Levels

    DOWAP’s preconfigured DP solution has leveraged the standard SAP functionality to work on different levels, allowing for additional flexibility while guaranteeing consistent data such as items, product family, locations…. 

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    Product classification

    Not all products within an organization behave in the same way. On the one hand, some are more important to business than others, on the other one, some are easier to predict than others due to their volatilité…

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    Management by exception

    The system alerts or the ones defined by the user, identify for you, the exception in real time. They are generated for every major fluctuation. You use the Alert Manager to analyze and manage these exceptions….

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