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The 4 Keys to Demand Planning in 2023 and Beyond

  1. The 4 Keys to Demand Planning in 2023 and Beyond Eva Dawkins Thursday, March 30th, 2023 9:30am PDT, 12:30pm EDT, 5:30pm BST Tara Dwyer Webinar Coordinator, Supply Chain Brief featuring Eva Dawkins Senior Consultant, Supply Chain Moderated by
  2. Avetta connects leading global organizations with more than 150,000 qualified suppliers, contractors, and vendors across 125+ countries. We support the sustainable growth of supply chains through trusted contractor prequalification, safety audits, monitoring, and more. With real results in helping companies reduce incidents, our highly configurable solutions elevate safety and sustainability in workplaces around the world—helping workers get home to their families each night. Learn more at
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  4. Eva Dawkins Senior Consultant, Supply Chain The 4 Keys to Demand Planning in 2023 and Beyond
  5. • Let’s Talk About Demand • Types • Components • The Good Ol’ Days • See What Had Happened Was…. • Little Fires Everywhere – The “New Normal” • Tech is The Word …Is The Word • But Wait, There’s More! • Begin At The Beginning • Keys To Demand Planning Success • Cleansing • Capturing • Collaboration • Communication • Consistency • Advice For The Graduate • Conclusion • Q&A What Will Be Covered
  6. Commercial Financial Sales & Operations Planning Purpose Owner Bias Collaboration& Process Reality Types of Demand
  7. DEMAND Historical Sales Volatility Trend Seasonality Promotion/ Incentives Product Lifecycle Components of Demand •Forecast • Expected • Demonstrated • Demonstrated by Like Item •Prior Experience •Market Intelligence •Contractual Obligations
  8. •Stable and consistent supply •2-3 years of reliable history •Low-cost, lean supply strategy •Siloed planning processes •Few(er) disruptions •Excel-based demand forecasting The Good Ol’ Days
  9. Demand planning is only getting more challenging 85% of a company’s performance depends on external factors Global disruptions 2020 & beyond + Unpredictable volatility • COVID-19 • Australian wildfires • Chip shortages • Suez Canal blocked • War in Ukraine • Delays at ports • Fluctuating fuel prices • Labor shortages • Fluctuating exchange rates Network complexity Customer expectations Competition Business model evolution Sustainable operational goals = The “new normal” See What Had Happened Was….
  10. • Significant demand shifts • Elasticity schmasticity • Increasing complexity Little Fires Everywhere
  11. 11 Resilient and Responsive! • No slack in the supply chain • Resources nearly fully to over-utilized • Costs maintained as low as possible • All resources (equipment, labor, transportation, facilities, etc.) closely matched to the Annual Plan Tech Is The Word • Time-sensitive production planning and direct scheduling • Inability to respond quickly to last-minute changes and unexpected disruptions with understanding of financial impacts Lean and Mean…
  12. …Is The Word Taking the pulse of shifting supply chains, August 2022 • 74% of supply chain leaders said investment in digital services around demand planning is a top priority 1 • More than 90% of supply chain leaders reported investments in digital supply chain technologies last year 1 Top Supply Chain Challenges for CPG companies in 2023, March, 2023 • Companies with advanced supplier-collaboration systems outperform their competitors 2 Supply Chain Technology, April 2022 • In a Gartner survey, 61% of respondents said technology is a source of competitive advantage. 3 • By 2026, more than 75% of commercial supply chain management application vendors will deliver embedded advanced analytics (AA), artificial intelligence (AI) and data science 3 How much is technology transforming supply chains? 2023 • When asked about the levels of investment in the next two years, artificial intelligence and machine learning are seeing the most spending, with 22% of executives saying their companies plan to invest at least $5 million in those technologies 4 • 83% of executives say their supply chain technology investments haven’t fully delivered expected results 4 1. 2. 3. 4.
  13. People Process Technology But Wait, There’s More!
  14. Begin At The Beginning DEMAND Procurement / Production Distribution Delivery ACTUAL SALES Raw Materials/Components Full Goods
  15. Cleansing Keys To Demand Planning Success Historical sales history is the basis for a statistical forecast. However, like any history actual sales may contain history that you don’t want to repeat in a future forecast. Cleansing involves scrubbing these anomalies or other non-repeating events from the sales history so that it is not a factor in future forecasts. Events to cleanse from sales history: • Promotional activity that won’t be repeated • Incentive-driven demand • Pandemic-driven demand • think toilet paper in March 2020 • Supply disruptions • Non-temporary pricing changes • All of the above for direct competitors • Holidays that change fiscal weeks (shift rather than scrub) • Easter • Thanksgiving
  16. Often, there is some data that should be taken into account when crafting a forecast that isn’t automatically captured in the same system where the forecast is managed. • Missed sales/shipments (out of stocks) of ongoing items due to supply disruptions and delays • Historical service levels tell a story • Assumptions upon which the forecast is based • Know what the numbers mean • Review assumptions for accuracy to create a virtuous circle that builds organizational acumen at developing and using assumptions to drive achievable goals Capturing Keys To Demand Planning Success
  17. Demand Planning, in particular development of a Consensus Demand Plan as part of Sales and Operations Planning, cannot be achieved without cross-functional collaboration among: • Finance • Commercial • Sales • Demand Planning • Operations • Supply Planning This Photo by Unknown Author is licensed under CC BY Collaboration Keys To Demand Planning Success Merriam-Webster defines collaboration: to work jointly with others or together especially in an intellectual endeavor. In the context of business, the “intellectual endeavor” is to devise a plan to increase profitability by achieving all of its associated financial and operational goals. Collaboration can occur within and across all levels and functions within an organization.
  18. A formal Communication Plan around Demand Planning is necessary to ensure all of the right people are involved in the process providing all of the necessary and best, most up-to-date information. Communication should be intentional and not left to solely organic interactions. Communicating crucial information should not be left to the whim of an individual team member. Communication includes ALL forms of communication – email, reports, meetings, etc. Healthy processes ensure communication occurs, down, out and up, openly and frequently. Avoiding the blame game also keeps the lines of communication flowing freely. This Photo by Unknown Author is licensed under CC BY-SA-NC This Photo by Unknown Author is licensed under CC BY-SA Communication Keys To Demand Planning Success
  19. Consistency Keys To Demand Planning Success Consistency in this context means that processes always act or behave in the same way. It means that regardless of who is performing a task in the process the results or output is similar in quality. One way to achieve this is to document best practices and process guidelines for Demand Planning so that how each task is completed is the same each time regardless of which planner is performing it. Another way to create consistency in Demand Planning is to ensure the meetings, such as Portfolio Product Management and Sales and Operations Planning meetings, that support Demand Planning are held consistently. It’s important to stay the course as new Demand Planning processes evolve and adjust to the “new normal.” “Don’t let great be the enemy of good.”
  20. Don’t Get Stuck Short-Term Scenario Planning Mid-Term S&OP Long-Term Advice For The Graduate DEMAND SUPPLY • If you spend all your time firefighting you will spend all your time firefighting • Being right is NOT the sole purpose of planning • Mid- and long-term planning is a muscle that will get stronger the more you use it • Scenario planning seems like a waste of time until reality deviates from plan • Sales and Operations Planning is a like a marriage; it requires ongoing commitment and work
  21. Alignment Addresses Imbalance Conclusion
  22. Q&A TARA DWYER /in/dwyertara/ Webinar Coordinator, Supply Chain Brief EVA DAWKINS /in/eva-dawkins-mba-b92905a/ Senior Consultant, Supply Chain