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April 5, 2024

o9 Demand Planning - Forecast Layers and Assumptions

Venture deeper into the intricacies of demand planning with Part 3 of our 4-part series. This episode focuses on the critical components of demand planning—demand assumptions and forecast layers, and their pivotal role in achieving a comprehensive consensus process among planning stakeholders. Through the o9 platform, we explore a structured framework designed to systematically capture and organize business intelligence and market insights from various teams, addressing common challenges faced by organizations.

This video enlightens viewers on:
- The importance of systematically capturing demand assumptions and forecast layers to avoid loss of critical insights during assortment and mix changes, or when dealing with overarching forecast overrides.
- Detailed walkthroughs on how to manage demand assumptions within the o9 platform across different roles such as sales, marketing, or demand planners, including functionalities for creating, managing, and collaborating on demand volume assumptions.
- An overview of the o9 framework that allows for the organization of adjustments in the consensus forecast, maintaining traceability of changes by role or type of adjustment, thus facilitating a transparent and collaborative planning process.

Learn how o9's innovative approach to demand assumptions and forecast layers empowers large and small organizations alike to maintain the context behind the numbers, ensuring that every action taken is grounded in data-driven knowledge.

Why are demand assumptions and forecast layers important?

In any demand consensus process, the various planning stakeholders providing business intelligence and market insights. The challenges we have seen are multiple. They are either not captured systematically, just stored at the lower level and then lost when assortment and mixes change, or added as an overall forecast override where it is impossible to understand who made the changes or why without resorting to comments and notes. This becomes especially relevant in large organizations with hundreds of people working on the numbers. o9 brings in a framework to collect demand assumptions and forecast layers which will provide a structured approach to organize the multiple inputs from various teams during a consensus process.

Let's look at how to perform demand assumptions and forecast layers in the o9 platform. Demand assumptions can be managed by any role such as sales, marketing, or demand planners. The master header contains all the information during the creation of some additional auto populated fields. Such as owner, create date, and status. The details input grid is whether demand volume assumptions can be entered and maintained.

The month assumptions can be created at aggregated levels, and this will create "assumption lines" for its unique inter action affected by that assumption. If the lower planning level mix or assortment changes, the overall volumes of each demand assumption are still respected and the lower levels are changed to consider the latest mix.

This feature makes it easier for planners to create, manage, and collaborate demands assumptions as any level of the hierarchy. These volume assumptions will be stored at the level specified, making it easier to create, manage, and collaborate. The demand assumption feature includes two approval workflows.

In workflow one, partners can initiate the demand assumption process. That means they can create a demand assumption and add volume to it. However, it is only the planner who can submit the created demand assumption to impact the consensus forecast. In workflow two, the demand planners can create and submit the demand assumption independently.

This is a most simplified workflow. Here, you can see the copy, reject, cancel, and submit action buttons. And here, the demand assumptions status and ownership information can be reviewed.

With the forecast layers, you can organize the adjustments input to the consensus to maintain the traceability of the overall changes. For example, you could separate by role, sales, marketing, finance adjustments, or by type of adjustment, such as promotions, marketing events, pricing changes, competitor activity, new product introductions, or any changes in market share and so on. These layers can be added to the system statistical forecast to make up the consensus forecast. With the o9 framework for demand assumptions and forecast layers, any organization, no matter how big or small, will be able to have a systematic way to stop the context behind the numbers, empowering your actions from data to knowledge decisions.

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