SDCExec.com |

By Patrick Bower and Buks Van Zyl

Driven by an unprecedented spike in marketplace activity — new product introductions, promotions, the explosion of stock-keeping unit (SKU) counts, price-related "gaming," savvier consumers, and the now-global crush of competitive pressure — a sharper view of future demand is a must-have weapon in the quest for nimble supply chains that can rapidly respond to fluctuations in demand patterns.

Across all industries, organizations are struggling to meet the market-driven surge in customer service requirements while simultaneously striving to make the most of working capital. Hypercompetition is driving down prices, leading many to choose offshoring as a way to reduce costs and manage pricing. Yet solutions like offshoring have their own risks, as revealed in cautionary tales about wrong inventories being shipped overseas or costly air freight shipments from distant supply lines to meet urgent customer needs.

The heightened urgency to improve demand planning is also being driven by development of other internal processes like Lean, sales and operations planning (S&OP), and Sarbanes-Oxley compliance. S&OP emphasizes the importance of a one-number plan. Lean, and similar best-practice supply-centered processes, address the importance of a quality, single-number demand signal to propagate though the supply chain. And Sarbanes-Oxley's requires a reality-based portrayal of future business opportunities, which is another reason to improve demand planning process output.

With ever more complex demand planning puzzles to solve and with greater urgency to develop demand planning expertise — within and throughout their own organizations — business leaders are focusing on comprehensive approaches to enable high-performance demand planning. In fact, many view optimized demand planning as the only realistic lever to help manage supply chains in today's ruthless markets.

Gone are the days of narrowly focused "silo" strategies, based on a tool, a process or a training plan. Today's best-practice approach is much more comprehensive, based on a holistic model that incorporates people, process and technology improvements to enable optimal demand planning.

Breaking Down Demand Planning

With decades of hands-on experience and insight into real-world challenges facing global supply-centric organizations, our company's industry-veteran supply chain specialists developed a Demand Excellence process approach based on this all-encompassing model for a number of reasons.

First, we witnessed firsthand the need to define a demand planning standard that breaks down the silo approach and collectively examines the processes and sub-processes that support and enable the tools, the consensus process and the overall business needs of an organization to develop a quality demand plan.