This website does not support Internet Explorer. Please, switch to Edge, Chrome, or Firefox browser to view this page.

Learn about IE support
o9 video

Watch next

July 17, 2023

What is Demand Planning?

In this video, we discuss the definition of demand planning and the seven key steps involved in the demand planning process. We also discuss the importance of demand planning for businesses of all sizes.

Demand planning is the process of predicting future demand for products or services. This forecast is then used to make decisions about inventory levels, production schedules, and marketing campaigns.

Demand planning is important for businesses of all sizes because it helps them to ensure that they have the right amount of products or services available to meet customer demand. This can help businesses to improve their customer service levels and avoid stockouts.

The seven key steps involved in the demand planning process are:
1. Collecting critical information and data
2. Measuring the accuracy of predictions against actuals
3. Creating a baseline forecast
4. Applying lessons learned
5. Incorporating analyst and planner insight
6. Editing, reviewing, and checking the forecast
7. Approving and submitting the final demand forecast

What is the definition of Demand Planning? And what does Demand Planning consist of? Demand Planning is a prediction of what a company intends to sell in the future. It consists of determining what demand there will be for it's products and then building plans to support that estimated demand.

As an example, if this is where you stand today, looking back, you know the products and volumes that were sold, but you need to know what you will be able to sell tomorrow and further into the future. But Demand Planning breaks this information down into much more detail. You need to predict what products that you plan to sell and how many of them you need to predict, where you plan to sell all these products, and how you will process them through your distribution network And when in the future they will be sold. Demand Planning is a core supply chain activity in all types of industries and businesses.

From retail to services and whether business to business or business to consumer, a Demand Plan could be for end consumer products or products that go into end consumer products or service time. Demand Planning involves the following seven key steps on a regular basis: collecting critical information and data, measuring the accuracy of predictions against actuals or post-game analysis, creating a baseline forecast and sometimes a promotional uplift too applying lessons learned, analyst and planet insight into the forecast, editing, reviewing and checking the forecast, approving and submitting the final demand forecast, archiving and preparing to begin the forecast cycle again.

In summary, consider the input to Demand Planning as the question what is going to happen and the output of Demand Planning being we think this is likely to happen.

O9 guide ai ml mockup

Building a superior forecasting model with AI/ML

AI/ML-based forecasting models have become essential. Learn how to build the right planning solutions now.

I agree to the privacy policy.

Resources

View our related articles, white papers, use cases & videos

video8 min

How to Measure a Demand Plan: The 5 Most Important Elements

Auto draft thumbnail
video2 min

Large Scale CPG Company and o9 — Summary of Machine Learning Forecasting

Auto draft thumbnail
video2 min

Machine Learning for Demand Forecasting

Auto draft thumbnail
resource

Retail best practices for the holiday season

White paper mockup resource detail page copy
video5 min

Who Uses the Demand Plan and How?

Auto draft thumbnail
resource

Webinar: AI-driven capabilities for manufacturing organizations

Capital goods industry
video24 min

The story of AB InBev’s end-to-end planning transformation

The story of ab inbev’s end to end planning transformation thumbnail
video3 min

If Forecasting Is Never 100% Accurate, What’s the Point?

If forecasting is never 100% accurate, what’s the point? thumbnail
video4 min

How To Define Your Demand Planning Horizon

How to define your demand planning horizon thumbnail
video3 min

o9 Digital Brain — Driver based Machine Learning

Auto draft thumbnail
video0

o9 Demand Planning - Analysis Cockpit

Auto draft thumbnail
video2 min

The o9 unique platform in action — How to deal with a surge in demand?

Auto draft thumbnail