Moving beyond demand planning to demand management in a recession

[Randy Littleson]

Another insightful blog post entitled “How do I forecast during recession?” at the Infosys blog. I added a comment at their site, and have provided it here for completeness.


### My comment ###


I think this is a challenge for virtually all companies today. As you accurately point out, trying to predict future demand based on historical data is virtually impossible right now.
In addition to your good ideas, I would add a few others:

• Increase customer collaboration. Some companies call this demand co-planning. The basic notion is that you need to move from a hand-off process to a collaborative one, where you and your largest, most important customers are collaborating more regularly on their demand requirements. If you don’t already do this as a core part of your demand planning process, you need to because latency and intermediaries add more risk to the process.

• Increase your emphasis on demand management. Balancing demand and supply has always been a challenge, but more so in an increasingly volatile environment such as we have today. The traditional handoff process between the demand-side of the business to the supply-side needs to be replaced with a “bridging” process that fosters more collaborative demand and supply planning. These groups need to take a more holistic and real-time view of the inter-dependencies and resulting impacts of changing demand and/or supply. A key part of this process is simulating various possibilities and their associated action alternatives to increase your preparedness for the various scenarios that may unfold.

Randy Littleson is a Vice President for Kinaxis, provider of the on-demand RapidResponse service that empowers multi-enterprise manufacturers with the collaborative and integrated demand-supply planning, monitoring, and response capabilities.

[dreck]

Better yet, go lean and not have to rely on forecasts, that you know will be wrong.

One piece flow is difficult for most companies to achieve, but setting up a finished goods supermarket, that customers pull from and triggers the make or buy process is a better alternative.