Next Generation Demand Management

Chapter 4The Process

Continued demand volatility combined with market dynamics is compelling companies to develop and deploy more integrated analytic-driven demand management processes, which require predictive analytics, market intelligence, and more sophisticated technologies to achieve their revenue growth goals and objectives. These changes in the dynamics of the marketplace are driving the process focus of predicting and orchestrating the best demand response, and not simply forecasting supply based on static analysis and gut-feeling judgment. What's more, shrinking product life cycles, combined with a demanding marketplace, are sharply increasing the costs of choosing supply to correct for the wrong demand response. As a result, companies realize that market and channel dominance mandates a highly integrated and dynamic demand response. The strategic objective is to influence consumers in the market based on the strength of prevailing brands to purchase their products, thus pulling their products through the channels of distribution, rather than pushing products into the channel.

Demand management done well encompasses more than just forecasting. It incorporates sensing, shaping, and translation of a demand signal that planners can continuously fine-tune (or shape) based on key performance indicators (KPIs). This requires the combination of data, analytics, domain knowledge, and technology. Unfortunately, demand planning in most companies is based on an expert's gut-feeling ...