HomeArticlesDemand planning: why this process is vital to the success of.

Demand planning: why is this process vital to companies' success?

The demand planning it is a process that allows anticipating problems and optimizing resources, avoiding the formation of excessive inventories and reducing costs, while ensuring the availability of products and increasing customer satisfaction. Its elaboration should involve the coordination of all departments, ensuring accurate estimates and the establishment of future commercial policies and strategies, aligning operations to market needs. 

From theory to practice 

The first step in developing the demand planning it is essential to collect and analyze historical sales data, considering seasonality and trends. Then it is essential to seek 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, areas come together to discuss and align sales, manufacturing and inventory forecasts.Finally, it is critical to continuously monitor demand and adjust planning as needed, ensuring that the company adapts to changes that may occur.  

Among the main functions of the demand planning demand forecasting is highlighted, from which it is defined what and how much to produce and thus avoid excess or lack of inventory; the identification of patterns, which analyzes periods of greater and lesser demand in order to support managerial decisions; and the alignment between sales and operations, to ensure that the delivery capacity is in line with forecasts, avoiding divergences that may compromise operational efficiency.  

Benefits 

From the demand planning, the purchasing department can determine in advance the required amount of raw materials to maintain the continuous flow of production and finished items to meet consumers on time. This not only improves customer satisfaction and the company's image, but is also sustainable, as it avoids waste. In addition, it allows a more efficient organization of production, reducing storage costs and minimizing obsolescence.In this way, companies can optimize their resources, plan more accurately the budget and control their expenses effectively. 

In conclusion, the demand planning it is a process that predicts future product demand, aiming to optimize production, inventory management and delivery logistics, ensuring that supply efficiently meets consumer needs.By integrating historical data, analysis and collaboration between Sales & Operations, it is possible to make adjustments to facilitate the efficient management of inventories and production. Thus, companies can respond in an agile and strategic way to changes, maximizing their operational efficiency and competitiveness.  

Fernando Cavalcanti
Fernando Cavalcanti
Fernando Cavalcanti is an Account Executive at 4intelligence, a company specializing in data-driven business decision-making through artificial intelligence and integrated planning.
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