Demand planning is a multi-step supply chain management (SCM) process used to create forecasts. Effective demand planning can improve the accuracy of revenue forecasts, align inventory levels with fluctuating demand, and enhance profitability for a given channel or product.
The approach begins with a statistical forecast. Data sources for the forecast include firm and planned sales orders, blanket orders, customer stocking committments, and intercompany orders. The demand plan is used to drive the supply plan and is also a feeder into S&OP.
The DemandCaster Demand Planning process is managed as follows:
- Importing historical sales data: This is done either automatically via the DemandCaster Data Integration component or manually via a tab-delimited text file uploaded in the DemandCaster data upload portal.
- Creating statistical forecasts: Forecasts may be generated as frequently as desired. Most DemandCaster clients run new forecasts weekly or monthly.
- DemandCaster is built with the Forecast Pro forecasting engine. Forecast are typically run using Forecast’s Pro’s Expert Selection process. The built-in Expert system analyzes your data, selects the appropriate forecasting technique, builds the model and calculates the forecasts.
- User’s may override the Expert Selection to apply a different forcasting model or edit the forecasts to include upcoming events or promotions.
- Forecasts may be run in a variety of methods providing great flexibility:
- By customers in dollars which in turn is converted to product units
- By market category
- By product or product category
- By Top-Down, Bottom-Up, or Middle-Out aggregation
- Importing customer forecasts: DemandCaster’s Data Integration component is capable of connecting to external data sources where such data is shared. Customer or external sales forecasts may also be uploaded using Excel spreadsheets converted to text files.
- Collaborating with customers: DemandCaster data may be shared with customers as Excel spreadsheets. DemandCaster also has licensing options for sharing data via a special license that limits the type of data shared with your customers.
- Reviewing forecasts: Numerous metrics are included in DemandCaster to test the result. DemandCaster includes confidence indices, trend indices, hold-back testing, and other analytics to test the reliability and continually improve the forecasting process.