Demand Planning

Abstract

The result of the demand planning process is the establishment of independent requirements which will trigger the planning activities as distribution, production and procurement planning. Usually a sales forecast is the key input to the demand plan. This sales forecast is consolidated and checked regarding plausibility, probably checked against a statistical forecast and corrected according to the experience of the planner before releasing it for the subsequent planning steps. Figure 4.1 shows this process for a very simple supply chain with global demand planning and single sourcing local production planning: The monitoring of the forecast accuracy and a feasibility check against the planning constraints (e.g. capacity) are further common process steps. Depending on the business requirements there might be many others.