Demand Management –
Lets see what could be definition for Demand
Demand – Want for a particular product ,component or service. A demand could come from various sources. Below are some of the sources
- Customer order
- Inter-company requirement
- or any other manufacturer
Demand Management – is function of identifying demand for goods and services to support the need of market. demand management is a process which compare customer demand and an organisation output capablities and tries to balance the need .
Demand management is made up of following component
- Planning Demand
- Communicating demand
- Influencing demand
- Priotizing demand
Here in this part one section we will learn about Planning demand
Planning demand – is an plan for future action it is more than just predicting and forecasting activities.
Demand plan – is a document which request product and services from supply side of the organisation to meet the expected future demand for the organisation’s product and services in each period
Demand plan is an estimate of how many product and services customer will purchase at what price and on what time table so the organisation and supplier can determine how much to produce and when ti produce it and where to ship it.
what is all included in demand plan that can influence the number of units and monetary value in demand plan
- product and brand management
- business plan and strategy
Apart from above inputs – Assumptions and level of uncertainty is also involved by person responsible for preparing forecast
A demand plan is used by multiples areas of the organisation because it indicates demand both in unit and monetary value
Operations , Logistics ,customer service ,product development can review the demand plan in terms of units (How many ) and finance team can view this in monetary amount.
A demand plan is also used for a control on individual departments with an organisations .
Demand plan need to be created for at least 18 months in provision so the best time horizon for which the demand plan should be created is for 18 Month and it should be open to revise with in this period with proper updates and communication we receive from various department mainly marketing and sales ..
So our next chapter is Communicating demand – and we will see that how communication demand really work and impact of communicating demand in forecasting as well as on Demand plan.
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