SUPPLY CHAIN - Demand Planning Checklist

1. Demand Planning for Inventory and Capacity
Utilization
8th Express, Logistics and Supply Chain Conclave

2. My friend want to say something
“The more Inventory we have
the better we can respond on
our customers ”
“We offer our clients 100 %
availability of products at any
time and place, irregardless the
costs(Which we don’t know)”

3. My friend want to say something
“We do not have a clue what our
customers demand in the future”
The quantities of products we produce
depends on maximum usage of our
manufacturing Capacity

4. Top Supply Chain Management Areas targeted
for Improvement in 2014
Best in Class Industry Average Laggards
63% 63%
53%
41%
51%
43%
45%
36%
43%
70%
60%
50%
40%
30%
20%
10%
0%
Supply Chain Visibility Supply Chain Collaboration Sourcing/Procurement
Data Source : Aberdeen Group, November 2013

5. Effective Demand Planning
Sourcing/
Procurement
Supply chain
Collaboration
Supply chain
Visibility
Demand
Planning

6. Demand Planning Major steps of Checklist
1.Get the Right Information
2.React Faster
3.Bridge the Divide
4.Understand the Impact

7. Get the Right Information
 Create and Manage Forecast
• Create and manage forecasts at, or as close as possible to, individual stock-keeping
units (SKUs).
 Create a consensus forecast.
• Ensure that you capture and consolidate forecast input from all the
necessary disparate sources
 Establish supply chain visibility into your multi-enterprise,
multi-tier supply chain.

8. React Faster
 Update forecasts more frequently.
• In an environment of high variability, traditional monthly planning cycles do
little to provide accurate direction from a daily perspective.
• A reconciliation of supply and demand plans needs to be done on a more
frequent basis.

9. React Faster
 Become exception-driven.
 Clear operations performance thresholds and activate an alerting process
 Automated solutions can sift through all the activities, uncovering the truly
important information and understanding the domino relationships and
cumulative effects of multiple events.
 Shortening the time to know about a problem drives faster response and
reduces the magnitude of any impact

10. React Faster
 Respond immediately to reduced or cancelled demand.
• It is critical that companies react to unplanned cancelled
demand with equal fevour as when trying to meet an
unexpected new order.
• When the customer cancels an order or reduces forecast, many
times the customer service representative (CSR) removes the
order and that's the end of it.

11. Bridge the Divide
 Knock down the internal silos.
• Ensure that demand and supply are looked at together - by
everyone.
• Individual groups need to take a more holistic and real-time view
of the interdependencies. A key part of this process is the ability
to simulate various demand-supply scenarios and their
associated action alternatives to increase preparedness for the
various possibilities that may unfold or have unexpectedly taken
place.

12. Bridge the Divide
 Increase customer collaboration.
• Determine which customers represent the bulk of your
business, which customers exhibit the largest or most
frequent changes in demand, and which customers
provide you with the most profit.
• Demand co-planning. :The basic notion is that you need
to move from a handoff process to a collaborative one,
where you and your customers are collaborating more
regularly on their demand requirements.

13. Understand the Impact
 Align Demand Planning
 Align demand management decisions with the operations
performance metrics of the company

14. Demand Planning And Inventory
S
e
r
v
i
c
e
L
e
v
e
l
Lower Inventory carrying
cost
Improved Inventory
Visibility
Reduce Cycle Times
Measure and Improve
Forecast Accuracy
Return On Inventory

15. Benefit of Effective Demand Planning on
Inventory
• Improve on-time delivery
performance.
• Lower inventory levels while
increasing inventory turns.
• Reduce inventory obsolescence.
• Reduce cash-to-cash cycle times.
• Improve profitability.

16. Questions if any

17. Thank You For Your Time
And Consideration.