High Tech demand planning is characterized by supply and demand behavior of equal size players

The High-Tech value chain is driven by consumer demand at the retail and e-commerce level. Key factors influencing this demand include: 

1. Macro marketing promotions (e.g., TV ads, newspaper ads, etc.) 

2. Retail tactical promotions 

3. Seasonality (e.g., back-to-school, holiday seasons) 

4. Collaborations between retailers and OEM manufacturers 

5. Short product lifecycles due to rapidly evolving technology 

Consumer purchasing patterns for high tech products can vary significantly across different time periods, with notable spikes during peak seasons like back-to-school and Christmas. This dynamic demand landscape requires close coordination between retailers, OEMs, component manufacturers, and suppliers to effectively manage inventory and meet consumer needs.

This dynamic landscape requires agile and responsive demand planning strategies that can adapt to rapid technological advancements, shifting consumer preferences, and the ever-present challenge of product obsolescence. The ability to accurately forecast and respond to these fluctuations is critical for success in the high-tech industry. 

There are a variety of industries that use demand planning to improve their business model.

Medical Devices 

Medical device manufacturers, particularly in orthopedics, face unique challenges. They produce and ship numerous components, with demand often arising close to surgical dates. Their primary demand is driven by small distributors supplying hospitals and healthcare providers. Accurate forecasting is crucial to ensure the availability of specific implants and instruments for scheduled procedures. 

Retail Cafes 

Fast-food chains and cafes rely heavily on demand planning for perishable goods and labor scheduling. They must prepare baked goods and ingredients for specific dayparts based on projected customer traffic. Demand fluctuates with regional events, holidays, and even weather patterns. Accurate forecasting helps minimize waste while ensuring customer satisfaction. 

Gift Cards 

Financial institutions have entered the retail space with prepaid gift cards. This product requires significant investment in design and printing. Banks now apply CPG-style demand planning practices to optimize inventory levels across retail channels. Seasonal trends and promotional activities heavily influence demand patterns for these cards. 

ATMs 

ATM operators face a delicate balance: maintaining sufficient cash to meet customer needs while minimizing idle funds that don't generate interest. Banks employ sophisticated forecasting algorithms to optimize cash levels at each ATM location. These models consider factors such as historical withdrawal patterns, local events, and even day-of-week variations to ensure optimal cash availability.

Big Box retailers were the driving force behind many planning initiatives including CPFR and demand forecasting...

The key challenge for the retail supply chain is to minimize or eliminate shelf out-of-stock at retail. This implies two things:

1. The retail store has the right planogram at the store level with the optimal number of facings of the product and the appropriate backroom inventory to replenish.

2. The retailer has the optimal Distribution center inventory so the stores could be replenished periodically to prevent out-of-stocks at the store level. Reconciling the bottom up & the top-down forecasts.

So this is a large-scale challenge for the retailer to order the correct quantity of the product from the manufacturer at the regional level, then have this get allocated to their distribution centers and stores. Various forecasting systems attempt to predict store-level demand. But this could be a highly inaccurate forecast since demand could be spotty and is also characterized by infrequent demand.

However, this forecast could be highly inaccurate due to spotty and infrequent demand patterns. An alternative approach is to segment stores into high-volume and low-volume categories, establishing appropriate service levels and inventory levels for each. Once this segmentation is complete, the aggregate forecast can be allocated to the store level with a defined confidence level for replenishment. Thus, demand forecasting at the retail level becomes a combination of seasonal smoothing algorithms complemented by robust allocation methodologies. This approach not only enhances inventory management but also improves customer satisfaction by ensuring product availability. By continuously refining these forecasts and adjusting strategies based on real-time data, retailers can better respond to changing consumer demands and market conditions. 

The pharmaceutical value chain is dependent on two major demand forecasts:

1. Long-term forecast for new pharma launches and supply chain readiness: This includes making accurate market potential and launch forecasts which drives the capacity building so that it is ready for FDA approval and cGMP compliance.

2. Short to medium term replenishment forecasts that are based truly on-demand plans: This is for established products but still driven by patient demand

Food and Beverage sector serves a unique model where most of the shipments are routed through the distributor model...

Here we describe the demand model for the beverage industry, particularly breweries. Breweries operate within a unique supply chain model where distributors play a pivotal role. Breweries typically route their products through distributors to reach various retail establishments, including bars, restaurants, and liquor stores. For breweries, the critical metric is the shipment to retail, which is driven by the end-consumer beer consumption. 

Demand in this sector is characterized by strong seasonal patterns, with peaks around major holidays and regional events such as significant sports tournaments, like the Super Bowl. Additionally, promotional activities by retail establishments can significantly influence demand fluctuations. The core of brewery demand is primarily determined by retail shipments, as retail establishments adjust their stock levels based on consumer pull-through. 

Shipments to retail from distributors serve as a key independent variable in supply chain planning. Both distributor inventory levels and retail shipments are crucial factors in formulating outbound shipment strategies. Competitive activity in the market also plays a substantial role in estimating retail demand. 

The supply chain dynamics in this industry require careful consideration of multiple factors. Breweries must balance production with distributor needs, while distributors must align their inventory with retail demand. This interconnected system necessitates accurate forecasting and an agile response to market changes, ensuring an efficient flow from a brewery to a consumer while minimizing overstock or stockout situations. 

Demand Planning process is well developed in the CPG sector. The demand that drives CPG supply chain is the demand from retail.

Demand Planning is a best practice that emerged from the Consumer-Packaged Goods (CPG) industry in the 1980s. Much of the drive for developing this practice came from major retailers like Walmart and Target. A lot was at stake for retailers during store promotions, especially when shelves were out of stock. They needed a comprehensive model to communicate consumer demand throughout the manufacturer's supply chain, ensuring product availability at the right place and time. The CPG value chain encompasses the consumer, consumer pantry, retail channels (both - big box and small retailers), distributors, CPG manufacturers, and their raw material suppliers. 

The ultimate consumer demand at the store level drives the entire CPG value chain. Consumer purchasing decisions are influenced by broad marketing promotions such as TV and newspaper ads, as well as store-level tactical promotions. Store-level tactical promotions involve close collaboration between the retailer and the CPG manufacturer's sales team. Typically, most manufacturers have local sales offices near retailers. For example, companies like Unilever have customer business offices in Bentonville to serve Walmart's needs. Similar setups can be found at other retailer headquarters.