JUDITH RAMOS
Demand management is one of the steps of the supply chain management and is defined as a set of processes and capabilities that helps to forecast the demand and synchronize it with production, procurement and distribution functions. Is essential to balance the customers’ requirements with the firm supply capabilities in order to know the demand that the company can cover. But apart from its main function, demand management is useful to:
– Plan the number of resources that the company will use to produce and order them to the suppliers
– Know the available stock, security stock and needed stock
– Avoid stock breaking and obsolescence
– Do the sales planning, considering the sales trend, seasonality or irregularity to develop sales strategies
– Give a better service to the customer, attending his demands faster
– Reduce the number of stocks in the warehouse, what supposes a cost reduction for the company
– Make a plan of production more accurate and efficient using demand forecasting
Also, information technologies play a significant role in the development of the demand planning, because if the company doesn’t have an adequate software to control the number of stocks, it won’t be able to plan the demand correctly.
Finally, in order to create a good demand planning is necessary that the company has analysis of the prior demand, knows the productive capacity of its business, has a good communication with the client in order to reduce the uncertainty of demand, has a good knowledge of the prices and competition of the market and also establishes lasting agreements with the suppliers.
Sources of information:
http://www.w3ii.com/es/itil/demand_management.html
https://meetlogistics.com/demand-planning/planificar-la-demanda/
https://meetlogistics.com/demand-planning/planificacion-de-la-demanda-fundamentos/
Business Logistics 