Demand Planning

Successful businesses are more often than not demand driven and plan their operations around accurately forecasting demand. However, Demand Planning is about much more than just forecasting.

Challenges

Whether your industry is related to consumer goods, manufacturing, retail, services or pharmaceutical forecasting customer demand is critical. Yet while the importance of accurate demand forecasting has increased, it has also become more and more difficult to get right, due to great demand volatility and key drivers such as:

  • Shorter product lifecycles
  • Changing customer requirements
  • Macro-economic conditions
  • Global competition

However, despite these changing conditions, many organisation's demand planning capability has failed to move with the times, often retaining a disintegrated, simplistic approach that is highly manual and lacks ownership.

Opportunities

Demand planning is a complex discipline which incorporates inputs from sales, marketing and operations as well as suppliers and customers. It is also more than just forecasting; rather it is an integrated set of business processes across your company and your end to end supply chain.
When done well, these elements allow organisations to become Demand Driven and in turn get better results, including holding less inventory while achieving higher service levels and realising lower supply chain costs.

Approach

GRA has extensive experience in Demand Planning. We tailor demand planning processes, systems, data and performance measures to fit every organisations industry, business requirements and capability. For example, for many industries and organisations, we advocate a bottom up statistical forecasting approach. However for others, such as the fashion and apparel industries, top down merchandise planning may be more appropriate.
We will help grow your demand planning capability by undertaking the following as appropriate to your organisation:

  • Establishing forecast ownership and accountabilities
  • Utilising or implementing software and forecasting tools
  • Developing Collaborative Forecasting
  • Training and up-skilling of planners
  • Integrating event management (such as promotions) into planning processes
  • Lifecycle Planning (including New Item Introductions)
  • Improving planning efficiency based on an exception based view of forecasts
  • Managing opportunities, risks and assumptions
  • Scenario Planning
  • Developing and measuring appropriate KPIs and Remuneration packages
  • Integrating and improving the Demand Planning component of your S&OP Process

We will work with you to determine the best approach for your organisation in order to drive demand planning results.

Outcomes

Improving your demand planning capability will allow your organisation to:

  • Improve forecast accuracy
  • Deliver and hold inventory in the right locations and meet customer expectations
  • Provide greater visibility of future needs and highlight potential issues
  • Successfully manage events and promotions
  • Reduce noise, expedites and out-of-stocks, as well as redundant or out-of-date inventory
  • Better utilise systems and processes to drive improved returns
  • Manage opportunities, risks and assumptions
  • Grow confidence in forecasts – ultimately using your forecasts to drive strategic decisions
Benefits

Improved Demand Planning has many benefits. Typical benefits include:

  • Increased service levels up to 99.9%
  • 20-40% inventory investment reductions are possible
  • 10%-15% reduction in supply chain operating costs can be achieved
  • Significant working capital improvement
  • Compressed cash-to-cash cycles
  • Improved return on capital employed / net assets
  • Improved debt to equity ratios
  • Improved capacity and fixed asset utilisation
  • Improved relationships with suppliers and customers
  • Integration of business strategy and operational practices.

– BACK TO CONSULTING

Testimonials

"GRA are consummate professionals and have been instrumental in delivering real value from our supply chain."

– Scott Coulter, Chief Operating Officer, Comvita

Typical results

  • 20-40% inventory investment reduction
  • increased service levels ranging up to 99.9%
  • 10%-15% reduction in supply chain operating costs
  • 5%-20% spend management savings
  • the ability to fund business initiatives from operating cash flow (OCF) improvements
  • improved return on capital employed (ROCE)
  • a minimum 3:1 ROI (10:1 to 30:1 typical)