What do you do if your demand planning is underperforming?

1 Assess your current situation

The first step to improve your demand planning is to evaluate your current performance and identify the root causes of your underperformance. You can use metrics such as forecast accuracy, forecast bias, service level, inventory turnover, or fill rate to measure how well you are meeting your demand targets. You can also compare your actual demand with your forecasted demand and analyze the sources and patterns of deviation. For example, you might find that your demand is affected by seasonality, promotions, new product launches, or external factors.

2 Review your data quality and sources

The quality and accuracy of your demand planning depend largely on the quality and accuracy of your data. You need to ensure that you have reliable and relevant data sources that reflect the current and future market conditions and customer preferences. You should also check your data for errors, inconsistencies, or gaps that might skew your demand forecasts. You can use data cleansing and validation tools to improve your data quality and reduce noise and bias.

4 Collaborate with stakeholders and customers

Demand planning is not a solo activity, but a collaborative one that involves multiple stakeholders and customers. You need to communicate and coordinate with your suppliers, distributors, sales, marketing, finance, and operations teams to share information, insights, and feedback on your demand forecasts. You should also involve your customers in your demand planning process, as they are the ultimate source of demand and can provide valuable inputs on their needs, preferences, and expectations. You can use software for inventory management that enables collaboration and integration across different functions and platforms.

5 Monitor and adjust your demand plan

Demand planning is not a one-time task, but an ongoing process that requires constant monitoring and adjustment. You need to track your demand plan performance and compare it with your actual results and market changes. You should also update your demand plan regularly based on new data, information, or feedback. You can use software for inventory management that provides dashboards, reports, and alerts that help you monitor and adjust your demand plan in real time.

Demand planning is a vital skill for industrial engineers, as it helps them optimize their production, inventory, and distribution systems. By following these tips, you can improve your demand planning and achieve better outcomes for your business and customers.

6 Here’s what else to consider

This is a space to share examples, stories, or insights that don’t fit into any of the previous sections. What else would you like to add?