What Does a Demand Planner Do?

September 22, 2022

What is Demand Planning?

Demand planning is important in running a business to its total capacity. It is always of crucial importance to understand where demand levels are for your business sector so that you can thoroughly plan. Long story short, demand planning enables a business to predict future demand levels. This allows that company to plan how much of their goods or services to supply.

Why is Demand Planning Important?

With successful demand planning, a business will alter the number of goods or services they are putting out, depending on demand projections. This means that the company will save money in several areas. For instance, if the demand is projected to be low during a certain time, the company then knows that it can cut back on production temporarily. Therefore, the company will save money on production, storage, and transportation.

Likewise, demand also rises for a good or service, and there are plenty of reasons the demand may rise. These reasons include natural disasters, global disasters (such as a global pandemic), and even things as simple as a season change. For instance, if you sell coolers, you can expect demand to rise during the summer when people are more likely to spend more time outside. Increasing supply based on demand predictions will help ensure your product is available to your customers.

Steps for Demand Planning

Now that you are aware of what demand planning is and why it is important, you may be left wondering how to go about successfully planning for changes in demand. One important step in demand planning is to invest in demand planning software that will organize all data that you need to make correct predictions. After enough data has been gathered, it's time to use it.

There are three crucial steps included in successful demand planning. First, as mentioned above, gather and organize as much data as possible. This initial data should be internal information that includes information, such as shipment information and product order information. This step will give your company an initial prediction of demand levels, as they were for your company in the past.

The next step is to gather external information, which will help make your planning even more concise. This external data will include factors such as economic situations, such as recessions, or high-interest rates. It may also include data gathered on any partners that your company uses, such as shipping companies or storage facilities. You should be able to come up with a great demand forecast when you combine all the information.

The last step to demand planning is the actual planning part of the process. This may involve adjusting production rates or striking new deals with your storage facility or your shipping partner. This may also include promotions to move any additional goods through the market more quickly. Demand planners are important assets to any company, and they can definitely end up saving your company a lot of money and a lot of wasted products.

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