OPTIMIZING OPERATIONS ACROSS THE SUPPLY CHAIN
DEMAND PLANNING TECHNOLOGIES REDUCE INVENTORIES, SPUR COLLABORATION
Demand planning software packages can help
• Establish baseline sales forecasts, incorporating
• Perform sophisticated analysis that improves their
use of human and capital resources;
• Optimize pricing capabilities; and
• Better understand their markets and customers.
Yet to get the most out of these function-rich tools,
manufacturers must be willing to reorganize their
planning processes—and to share the resulting
insights with supply-chain partners and customers.
PREDICTING THE FUTURE
How does BMW know how many Mini Coopers it
will sell in North America? How many Priuses should
Toyota build to meet demand in the U.S. this year?
Worldwide? When is it time to tweak production—
upward or downward—to refl ect a change in
The short answer to all these questions is: No one
knows for sure. The long answer is: Everyone needs
and wants to know.
That’s why demand planning exists.
Demand planning hasn’t gotten the attention that
enterprise resource planning systems (ERP) or customer
relationship management (CRM) have received in
recent years. But that’s not to say it isn’t a sore spot
for many in the manufacturing and distribution
communities. “When I speak in front of industry
groups and ask how many people are happy with their
sales forecasts, I don’t see any hands at all,” says John
Pavain, president of Norwalk, Connecticut–based MaxQ
Technology, a developer of demand management
systems and a Microsoft® partner. “Demand planning
is an area that most companies need help in.”
POOR FORECASTING = POOR PROFITS
Whether it’s for consumer packaged goods, industrial
manufacturing, high tech and electronics, or automotive
demand, sales forecasts often lack the sophistication
needed to optimize both operations and profi ts.
“We’ve been pretty wrong on forecasting