What is Demand Planning and Why Is It Important?
Demand planning is a crucial process in supply chain management and business operations that involves forecasting and managing the demand for products or services. It aims to align a company's production, procurement, and distribution activities with anticipated customer demand to ensure that products or services are available when and where they are needed. The primary goal of demand planning is to strike a balance between supply and demand, optimizing inventory levels and minimizing costs while meeting customer expectations. Demand planning involves several key activities and considerations: Forecasting: The heart of demand planning is the creation of demand forecasts. These forecasts are based on historical sales data, market trends, customer orders, and other relevant information. Businesses use various quantitative and qualitative methods to develop these forecasts, such as statistical analysis, market research, and expert opinions. Data Analysis: Accurate demand planning re...