July 17, 2023
Demand planning granularity
In this video, we will discuss the importance of granularity in demand planning. We will explain what granularity is, why it is important, and how to get it right.
Demand planning is the process of forecasting future demand and making decisions based on that forecast. The granularity of a demand plan refers to the level of detail at which the demand is forecast.
For example, a demand plan could be forecast at the SKU level, which means that the forecast would be for a specific product, at a specific location, and at a specific time. Alternatively, a demand plan could be forecast at the product family level, which means that the forecast would be for a group of related products.
The level of granularity that is appropriate for a demand plan depends on the decisions that need to be made based on the forecast. For example, if the decision is to determine how much inventory to order, then the demand plan should be forecast at the SKU level. However, if the decision is to determine how much capacity to add, then the demand plan could be forecast at the product family level.
It is important to get the granularity of a demand plan right because if the forecast is too granular, it will be difficult to manage and update. However, if the forecast is not granular enough, it will not be useful for making decisions.
The following are some tips for getting the granularity of a demand plan right:u003cbru003e- Understand the decisions that need to be made based on the forecast.u003cbru003e- Consider the lead times of the supply chain.u003cbru003e- Consider the data that is available.u003cbru003e- Use a forecasting software that can handle different levels of granularity.
