Demand planning is a process that allows anticipating problems and optimizing resources, avoiding the formation of excessive stocks, reducing costs, ensuring product availability, increasing customer satisfaction. Its development should involve coordination of all departments, ensuring accurate estimates, establishing future commercial policies and strategies, aligning operations with market needs.
From theory to practice
The first step in developing demand planning is to collect and analyze historical sales data, considering seasonality and trends. Then, it is essential to gather information about competition, consumer behavior, and economic analysis. Integrating sales and operations areas into a collaborative action is also an important step, known as S&OP (Sales and Operations Planning). In this process, the areas come together to discuss and align sales, production, and inventory forecasts. Finally, it is crucial to continuously monitor demand and adjust planning as necessary, ensuring that the company adapts to potential changes.
Among the main functions of demand planning, the demand forecast stands out, from which what and how much to produce is defined to avoid excess or shortage of stock; pattern identification, which analyzes periods of higher and lower demand to support managerial decisions; and alignment between sales and operations to ensure that delivery capacity is in line with forecasts, avoiding divergences that may compromise operational efficiency.
Benefits
From demand planning, the purchasing department can determine in advance the necessary quantity of raw materials to maintain a continuous flow of production and finished items to meet consumers’ needs on time. This not only improves customer satisfaction and the company’s image but is also sustainable as it avoids wastage. Additionally, it allows for a more efficient organization of production, reducing storage costs and minimizing obsolescence. In this way, companies can optimize their resources, plan their budget more accurately, and effectively control expenses.
In conclusion, demand planning is a process that predicts the future demand for products, aiming to optimize production, inventory management, and delivery logistics, ensuring that supply efficiently meets consumers’ needs. By integrating historical data, analysis, and collaboration between Sales and Operations, adjustments can be made to facilitate efficient inventory and production management. Thus, companies can respond to changes swiftly and strategically, maximizing their operational efficiency and competitiveness.
