Where Does It Hurts: Demand Planning Pain Points

Demand planning is one of the most fundamental operations in supply chain. While planning for the future is already a challenge, assertiveness of the forecast contributes to a major part of it.

There are many factors that contribute to low assertiveness of the forecast. Below are some of the most common pain points of demand planning process –  
 
1.    Information Technology – Organization’s resistance to change to a newer tool due to complexity of tools or lack of resources to acquire the same is one of the most common reason we hear from Demand Planers. The other side of the coin is one where the management or the organization have moved to a newer tool but are not able to tap the usability of the tool. Speed of they planning tool is another important factor. Accuracy and Speed are the driving factors that a demand planner looks for in a Planning System. Slow demand planning system, old hardware, system integration very painful and ultimately disturb the whole supply chain management process.

2.    Data – Too much data or too little data is the main concern for any demand planner. No matter how fancy or expensive your systems are, if you are holding onto data rather than making sure it's in those systems, you’re still going to hit a pitfall on data flow resulting in poor accuracy. Also, poor dashboards, collaboration and double counting of promotions leads to more noise in data. Identifying Demand signal in the midst of chaotic Market has become more and common. It increases the burden on the forecasting system.

3.    Demand Variability – One of the most common issue we hear from our clients are about demand variability of products or what we address as bullwhip effect which became more evident across the industries during COVID. An unexpected spike in Demand due to panic buying which result in empty shelves causing a domino effect leading to loss of sales for the retailers, confusion on procurement strategy for distributors & over swamped Manufacturing Plants.

4.    Resource – Demand planners are the key resources in demand planning. Budgeting problems, depthless Hierarchies, right system is not available (Are you still using excel). As the world changes and technological upgrades, your planning system should robust and efficient.

5.    Process and Communication gaps - There is no one size fits all scenario when it comes to demand planning, every industry, every company, every product has a different demand depending on changing times and market scenarios. Should one adopt a Demand planning strategy that is faster or something that is slow or accurate? Is your forecast plan catering to the right channels?

To thrive in today’s competitive markets, you must anticipate the unexpected while keeping check on inventory and demand. Our Cloud-based SCM suite puts you on a fast track to a custom tailored Demand Planning Process.