SAP SCM: Applications and Modeling for Supply Chain Management (with BW Primer)

Chapter 9. Demand Planning Module

DP addresses needs for development of an unconstrained demand forecast as well as demand allocation among available global resources.

The Demand Planning (DP) module of SCM APO addresses the business interests of what is broadly described as demand management by both industry and APICS. In the supply chain management (SCM) context there are generally two outcomes sought from the application of DP: (1) analysis and generation of demand forecast, which is more accurately described as a demand signal, and (2) analysis and generation of demand allocations, where unsatisfied demand is delegated or assigned to specific geographies or sites for fulfillment (Exhibit 9.1).

Figure 9.1. DP in the Supply Chain Context

In either case, demand management is not concerned with common supply chain constraints of capacity and supply. An effective demand signal is one that approaches the most accurate, advanced picture of demand possible and neither capacity nor supply amount to very meaningful inputs to such a question. On settlement, however, a demand forecast or signal is provided to supply network planning (SNP) where constraints are introduced to planning. A demand “release” process to seed SNP is described in Chapter 10. Sometimes there will be more than one demand signal fed to SNP, as may be the case with a demand forecast, customer sales orders (i.e., explicit ...