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Global Supply Chain Group’s Guide to Demand Management

Discover why COVID-19 has turned the art of demand management on its head?

There was a time when demand planning was reputed to be one of the easiest parts of supply chain management. You could count on almost anybody to be able to count the number of cartons in the warehouse or to take last periods sales and multiply it by a growth factor to forecast the demand.

Not any more.

Covid-19 has quickly changed all that. Demand has become almost as difficult to manage as it is to manage the supply.  This guide will go into the depth of what has changed and how to manage demand in the new era.

Go deep for pearls of wisdom

This guide is for anyone who wants to get into the depth of demand management protocol. Obviously, that would include people charged with the task of demand planning, demand forecasting, demand prediction, market intelligence and demand shaping within their organisation. While this report does not focus on demand generation and demand augmentation per se, because that is the territory of sales experts, this report could be useful to individuals who are primarily focused on those tasks, as well to the supply chain managers.

Drivers of demand management remain the same

It covers the demand management protocol in detail – without missing any critical steps, or taking any short cuts. Most companies struggle with demand management because of missing details, or short cuts in the process. This report will lead you to think carefully about the demand management process within your company to identify the short cuts and missing steps so that you can help redesign a custom-built demand management process tailored to your market place.

A cookie-cutter approach to demand management can be dangerous

Do not use this report as prescriptive advice. Rather, use it to inform and spur you thinking on the topic of demand management. Every company is different – its product, its market and its sales strategy has to be unique in order to stand out in today’s marketplace. For example, a demand management process that would be ideal for commodities company could be disastrous for a consumer goods company, or vice versa. Rather than outline a mish-mash of demand management processes that we have worked on across the globe in a variety of industries, this report covers the underlying principles that are often ignored or skimmed over.

Encourage the principles-based approach to demand management

This report will help you go to the first principles, clarify your own objectives based on the business strategy, and then design a demand management process that can be tweaked to work in your business case. With the information in this report and sufficient experience in practical demand management, you should be able to do this in any organisation you join.

The crux of demand management

The essence of demand management is an ability to have a structured conversation with all the constituents of demand so that you can do your best to make them happy while maximising your revenue out of a market at a particular time and place. Whether these are internal stakeholders in the sales and marketing, or the external stakeholders such as market intermediaries or the customers themselves – all of them need to be engaged in the process from start to finish.

Optimise market harvesting

That is the only way you can ensure that you are able to derive the maximum revenue while minimising your cost of market fulfilment.

There are subtle distinctions which most supply chain managers fail to make but are indeed game-changers. For example, the difference between demand planning and demand management is very important, especially in the times of COVID-19 related restrictions and other economic upheavals.

Unless supply chain managers are able to educate their peers in rest of the management team about these subtle distinctions it is likely that the supply chain managers (and demand managers) will not be able to effectively discharge their own responsibilities.

Demand management must not be superficial and formulaic

A shallow approach to demand management can lead to accusations of having lost touch with the marketplace. There might even be some truth in this accusation. How do you make sure your demand management practice is not accused of this common curse?

If you are the right person for this guide, you will benefit by being able to effectively do your job faster, easier and with less stress – with more integrity and ability to defend your numbers.

Gain credibility, move your career up a notch

Many newcomers are put in the demand planning positions to test them before they are put in more responsible positions in supply chain management. They are not only tested by the salesforce, but also by their peers in supply chain. A positive change introduced in the demand management process in an appropriate manner will go a long way to gain more credibility and prove yourself worthy of bigger and better roles.

Picture what happens downstream when, at the very outset of the supply chain planning process, the demand management lacks credibility or reliability. The resulting chaos and scepticism can almost never be fully doused. Why not tackle the problem at the very outset then.

A smoother demand management protocol leads to a robust S & OP process

Engage the entire management team into a robust sales and operations planning process by ensuring a smooth start. Starting off on the right footing is winning half the battle. We realised this truism only after we saw several S & OP processes floundering due to a lack of credibility in the forecast demand, and supply chain managers struggling to gain traction.

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