The social and economic impact of COVID-19 has dramatically affected supply chains and demand planning across all industries. Then there’s the Amazon effect, which has led to sky-high consumer expectations of the ordering and delivery process. Demand planners for retailers and consumer goods companies have quickly realized they have no real view into consumer demand and are not able to react to shifting consumer demand patterns.
The demand planning journey
Demand planning is vitally important to the profitability of retail, consumer goods and manufacturing organizations. Getting it right -- or getting it wrong -- can have a huge impact on customer perceptions of your brand, particularly in this age of instant gratification.
The evolution of analytics-driven, intelligent demand planning has spanned over the past 30 years. For many of the organizations on the journey to level up their demand planning, moving from stage 1 to stage 2 has taken over 20 years. Moving to stage 3 has been even more challenging, with only a few companies achieving success. Subsequently, only a handful of companies are slowly moving toward stage 4: Becoming an analytics-driven, intelligent demand planning organization. Here are the four stages of the demand management (DM) maturity model.
STAGE 1: 100% judgment: Mainly descriptive reporting and a highly manual process with little centralized data.
STAGE 2: ERP + collaboration: Reliance on historical data from ERP and manual input into Excel to create final top-down/bottom-up reports. Supply-centric planning process influenced by internal politics.
STAGE 3: Predictive analytics solution + ERP: Formalized forecasting using an automatic large-scale hierarchical forecasting solution, with predictive analytics complementing ERP.
STAGE 4: Data scientists + demand planners: Data scientists work with demand planners to optimize predictive modeling. Consumption-based forecasting and planning integrating POS/syndicated data with shipments using data, predictive analytics and machine learning. Speed, accuracy, and interactive collaboration are secured using a cloud-based solution.
Change the way demand planning is performed at your organization
Discover your organization’s demand planning maturity and deploy our recommendations to help you get to the next level. Start by asking yourself the following question.
"Are you stuck in a vicious cycle of planning demand using two-to-four week old data?"
If your answer is ‘yes,’ then it’s time to talk to SAS about how you can create a roadmap that gets you to Stage 4 of demand planning maturity. And this isn’t just about fending off competitive pressures. As the pandemic has shown us, seismic disruptions can strike at any time. Embracing uncertainty is essential – and that can only happen when demand planning is agile, capable of occurring at the edge, and is driven by techniques that can learn quickly, evaluate even the most complex situations, and deliver intelligent predictions.
For more information see the infographic Better to Best: Level Up Your Demand Planning.