Forecasting planning Demand management

The objective of order and demand management is to forecast future sales as precisely as possible, manage customer orders from entry to delivery, and consolidate forecast and orders with supply chain inventory requirements in order to generate a holistic demand plan for purchasing, production, and distribution planning. 

Demand forecasting, supply chain management, raw materials and product planning... 

Supply Chain Tactical Planning Demand Forecast Category Management Sales and Operations Planning New Product Launch Category Management... 

The implementation of a new demand management system helped a large U.S. direct store delivery company improve forecasting accuracy by 4 percent and increased service levels by 6 percent. Despite growing volumes, the company was able to hold inventory costs flat. The company also found that based on the new forecast, the sales department was better equipped to plan profitable sales promotions. The project s savings exceeded expectations. 

In this section, it will be performed a literature review for each one of the four categories of the Demand management - Statistical Forecast, Sales and Operations Planning (S OP), Collaborative Plaiming and Forecasting Replenishment (CPFR) and Vendor managed Inventory (VMI). This review allowed identify the DDSC characteristics for each category which was used to develop the five level maturity model. 

For demand management, it is suggested to focus on Statistical Forecast and Sales and Operations Planning (S OP) as described below ... 

There are over 400 products which makes it complicated and difficult to plan and manage the production and inventory of both raw materials and finished products. It is also difficult to forecast product demand as the products have different demand patterns. The demand of some products are highly stochastic while others are steady. Some products have seasonal demand patterns. And the demand of some products are related to the demand pattern of other products. To solve this problem, we have to design different forecast models for each products. Since the demands for over 400 products must be met, the plant must carefully plan and manage its production and raw materials supply. The charactristics of raw materials used in TCM also result in the difficulty in planning raw material procurement. Most of the raw materials of TCM production are natural, so the price often varies in different seasons. This also offers the procurement department opportunities to gain extra profit from properly planning its procurement and inventory. 

A push process conforms to a conventional supply chain management system going through typical stages in sequence. As shown in Figure 3.2, orders arrive at or after the demand cycle but always before the planning and procurement cycle and process is activated by a forecast or demand plan. Both raw and packaging materials are stored before production and products are manufactured to stock. The order fulfilment is achieved from the inventory of finished products. 

MODELS FOR FORECASTING, DEMAND MANAGEMENT, AND CAPACITY PLANNING... 

With improvements to forecasting and a reliable level of accuracy as deliverables, the firm looks next at its demand management and capacity planning systems. For any such system to work effectively, the firm must meticulously collect the necessary data from everyone who can generate valuable information about demand — internal sales representatives, customer service personnel, channel partners, distributors, customers, and consumers. This data must then be refined frequently and updated to match actual consumption and replenishment needs. Any alterations to changing consumer preferences, customer needs, buying patterns, competitive moves, and market conditions need to be part of the input to a dynamic system of analysis, direction, and response. The process is continuous and requires maintenance to keep the demand plan as close to actual consumption and replenishment needs as possible. 

---