Demand Planning

Stop Guessing. Start Planning.

Demand Planning image

Planning in silos has proven to produce plans that companies have little or no confidence in. The best demand plans are those that include input from all stakeholders, including the people closest to the customer in sales, and marketing as well as those closest to suppliers, in operations and finance. Together, these teams can balance market and customer needs against supply chain capabilities and risk.

With RapidResponse, you can create an insightful consensus demand plan that combines the historical statistical forecast with multiple functional forecast streams. This is done through a highly collaborative process within a single planning system.

To generate the statistical forecast, RapidResponse takes a specified historical demand stream as a reference and, using various statistical models, projects a future demand forecast. This then becomes an input to the consensus demand planning and forecasting process, where other forecast streams contributed by the sales, marketing, and finance teams are evaluated as a group. These are then combined and adjusted to form the final consensus demand forecast.

While the RapidResponse Demand Planning application aids companies to build a better plan, the challenge in today’s volatile environment is that the forecast will never be completely right. With this in mind, RapidResponse empowers companies with the ability to combine demand planning with a strategic capacity to continuously monitor and adjust the portions of the demand plan that present a variance.

Tailored for Your Business

RapidResponse applications are based on best-practices and standard process flows established by our years of successful deployments at a multitude of world-leading manufacturers. The out-of-the-box Demand Planning application enables quick implementations and also acts as an advanced starting point for a tailored solution that meets your company’s unique needs.

Added Value of Integrated Applications

Among the greatest advantages of any given RapidResponse application is the ability to leverage it in conjunction with other applications as part of a broader, integrated solution. Depending on the need, significant added benefits can be achieved by using the Demand Planning application alongside one or more related applications to ensure synchronization across interrelated planning processes.

Companies that use the Demand Planning application will have also subscribed to the S&OP application, and can also achieve broader value by using it with the Aggregate Supply Planning application.

Demand Planning Related Applications

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  • Improved demand forecast accuracy and demand management process cycle time
  • Demand collaboration across functions (sales, marketing, finance, demand planning) for holistic planning and analysis across a range of planning scenarios and action alternatives
  • Ability to integrate demand functions with other supply chain functions, including product lifecycle management
  • Better visibility to monitor and manage performance against targets
  • Better coordination to maximize revenue opportunities to drive growth, and proactively resolve demand and supply risks to minimize costs

Functional Capablilities

  • Input forecast from various constituents (sales, marketing, finance, statistical forecast) and use disaggregation functionality to drive demand into saleable SKs
  • Compare actuals, current demand plan, annual plan, aggregate supply plan, prior approved demand plan, and the demand plan from previous year in a time-phased graphical view
  • Monitor the forecast accuracy for all forecasts
  • Detect and “cleanse” historical data to remove data errors, outliers, and causals
  • Define statistical forecast generation parameters according to the different statistical models available
  • Define NPI/EOL statistical forecast generation variables
  • Generate statistical forecast scenarios
  • Edit combination of ratios of various forecast categories
  • Adjust or override the calculated demand plan for specific forecast items in specific date ranges
  • Publish consensus demand plan to aggregate supply planning
  • Monitor progress against targets
  • Manage assumptions

DP Demand Planner Dashboard

DP Consensus Demand Plan

Managing Performance

In addition to the standard corporate measures of revenue, margin, inventory value, on-time delivery and constraint utilization, metrics associated specifically with demand planning and forecasting are also included in the application’s out-of-the-box dashboards. This allows for focused management of the performance measures most applicable to the function at hand.

Added measures presented in the Demand Planning dashboard include:

  • Consensus Demand Plan—a comparison of each forecast stream in value ($) against the demand plan and annual plan.
  • Forecast Accuracy Exceptions—summary of the number of forecast items where the measure is above the critical limit for the selected category of forecast.
  • Data Errors/Outliers—summary of the number of data errors or data outliers within the historical actuals that need to be cleansed through the sales data conditioning process.
  • Forecast Value Add—an indication if each forecast stream is more or less accurate than the naïve forecast (the historical actuals of the previous period).

The measure of success of the statistical forecast sub-process is to check the accuracy of the generated forecast. RapidResponse supports a variety of ways to measure such accuracy including:

  • Mean Absolute Percentage Error (MAPE)
  • Volume Error
  • Value Error
  • MAE/Mean
  • Bias (MPE)
  • Stability (MAPD)
  • Mean Error
  • Mean Absolute Error (MAE)

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Demand Planning Process Components

The following graphic illustrates the out-of-the-box Demand Planning application process. This process can be tailored to meet your company's specific business needs.

Demand Planning Process

Demand Forecast Response Rate Customer Quote

Supply Planning Customer Quote

S&OP Scenario Planning Customer Quote

Displaced SAP APO Customer Quote

Cross Functional Supply Chain Visibility Customer Quote

Duncan Klett The Limitations of Supply Chain Planning Optimization

Duncan Klett - The Limitations of Supply Chain Planning Optimization

First Solar RapidResponse as a Platform for Driving Common Operations Performance Goals

First Solar - RapidResponse as a Platform for Driving Common Operations Performance Goals

Hubbell Managing Demand Variability

Hubbell - Managing Demand Variability

Hubbell RapidResponse and Demand Forecasting

Hubbell - RapidResponse and Demand Forecasting