What is demand management?
Demand management is a process within an organisation which enables that organisation to tailor its capacity to meet variations in demand or to manage the level of demand using marketing or supply chain management strategies.
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What are the challenges of demand management?
Demand management implementation often faces a few common challenges.
One of them is a poor understanding of automated algorithms, effectively how the parameters have been set on the replenishment systems.
Another is the balancing act for sales and working with retailers to create demand modelling to determine the timing, level and location of promotions.
There third is ‘elusive signals’ whereby manufacturers do not have a data structure or an established process for receiving, storing and using point of sale data from retailers.
Potential advantages of good demand management?
Demand management relies on accurate data and there is a need for collaborative demand forecasting, where firms reach a consensus, both internally and with their value chain partners on the expected level, timing, mix and location of demand. This data should form a common foundation for merchandising, logistics and budgeting processes. In return the following advantages of demand management should be experienced:
- Successfully anticipating and planning demand can provide a competitive advantage
- Improvement of demand forecasting is a key factor for improving supply chain operations
- Demand management can generate revenues by behaving proactively and driving the market through
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