- Understanding Demand Management Basics - Planning a Demand Management Process - Execution of Demand Management - Conducting a Performance Review of your Demand Management Process (and KPIs)

1. Principles of Demand Management
Next Level Purchasing Association
November 21, 2019
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Presented by:
Ron Crabtree
CPIM, CIRM, CSCP, MLSSBB, SCOR-P, CSCTA
© 2019 - MetaOps, Inc.

2. 2
Agenda
© 2019 - MetaOps, Inc.
• Understanding Demand Management
Basics
• Planning a Demand Management
Process
• Execution of Demand Management
• Conducting a Performance Review of
your Demand Management Process
(and KPIs)
• Q&A Forum

3. Let’s get a sense
for your
knowledge
Polling Question
– How you rank your
skill set in this subject
matter?
Range of 1 to 5, 1 =
Novice and 5 = Guru
© 2019 - MetaOps, Inc. 3

4. © 2019 - MetaOps, Inc.
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Let’s note a couple things…
• Copies of this
presentation’s
content upon
request. . .
• Rules of the road:
questions are good –
Use questions tool

5. Demand Management Basics
• Demand management is the supply
chain management process that
balances the customers' requirements
with the capabilities of the supply
chain. With the right process in place,
management can match supply with
demand proactively and execute the
plan with minimal disruptions.
• The process is not limited to
forecasting. It includes synchronizing
supply and demand, increasing
flexibility, and reducing variability.
https://www.researchgate.net/publication/235304082_The_Demand_
Management_Process
© 2019 - MetaOps, Inc. 5

6. SCOR® Processes
SCOR is a Registered Trademark of ASCM/APICS
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© 2019 - MetaOps, Inc.

7. SCOR® Processes
SCOR is a Registered Trademark of ASCM/APICS
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© 2019 - MetaOps, Inc.

8. Demand
Management
Basics
© 2019 - MetaOps, Inc. 8

9. Polling Question
Where is YOUR sourcing organization situated
in the end-to-end supply chain?
A – Far left – we are mining related or
farming (Tier 2)
B – Middle left – we do intermediate
processing (Tier 1)
C – Middle – core ‘value adder’ in the
stream
D – Middle right – we wholesale or
consolidate things before the retail/end
users touch
E – We are the end consumer firm/last
touch before retail / consumption
© 2019 - MetaOps, Inc. 9

10. SCOR® Plan Process
SCOR is a Registered Trademark of ASCM/APICS
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© 2019 - MetaOps, Inc.

11. SCOR® Business Models
SCOR is a Registered Trademark of ASCM/APICS
Retail Supply Chain Type = Is a hybrid: has attributes of Make to Stock & Make to
Order and Seasonal (sometimes huge) swings in demand.
© 2019 - MetaOps, Inc.
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12. Polling
Question
• Which type of supply
chain BEST characterizes
your firm?
–Make to Stock
–Make to Order
–Engineer To Order
–Retail
–Mixture .. of two or
more of these types

13. Demand
Management
Basics
• Understanding the
nature of demand – it
can be different from
product to product a
given firm produces /
sells to its customers
• No one-size-fits-all
solution for most
organizations
© 2019 - MetaOps, Inc. 13
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14. Demand Forecasting Polling
Question
© 2019 - MetaOps, Inc. 14
Which Quadrant is MOST like your
firm with respect to Demand
Forecasting?
1 - Low
Variability
/ Low
Volume
2 -Low
Variability
/ High
Volume
3 - High
Variability
/ Low
Volume
4 -High
Variability
/ High
Volume

15. Planning a
Demand
Management
Process
Demand Management Process
rigor is dictated and fed
information based on your
realities:
1. Position in the E2E Value
Delivery Stream;
2. Type of Supply Chain;
3. Nature of volatility and
predictability:
4. Maturity of the Demand
Planning Function inside
the Enterprise – Gartner
Maturity Model

16. Demand Driven Enterprise
 Maturity Models are available
 Many companies have already been assessed
 Concept is becoming more commonplace in industry
 Concept is effective, even in simplified application
What’s your level of enterprise maturity?
Example: Gartner Demand Driven Maturity Model® Registered Trademark of Gartner Research
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© 2019 - MetaOps, Inc.

17. Typical Demand Planning Process
Considerations:
• Review / cleans outliers for a
‘normal’ PAST demand by period
• Extrapolate a foreword-looking by
period (statistical view)
• Planner evaluation – adjust based on
the item, nature of demand
• Consider inputs from sales &
marketing; lifecycle stage, ECN risk;
Lay-out plan horizon; 3 to 60 mos.
• Feasibility, X-Function Collaboration
on Plan Validity – ‘what if’ analysis
• Align to Engineering (ECN risk),
Finance, Budget Cycles, Policies
© 2019 - MetaOps, Inc.
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Planner Modification
of Demand Forecast
Usage / Consumption
/ Sales History
Forecast of Un-Edited
Demand
Forward-looking inputs –
growth, decline, etc.
Execution of Demand
Plan
Align the Plan to
Other Functions

18. © QP Group
Consensus Process
Performance Deviations
Promotion Plan
Marketing
Sales
Sales Forecast
Analyst
Distribution
Planning
Distribution
Capabilities
Inventory Position
Statistical
Forecasts
Historical Shipments
Forecasting Perf
Sales Forecasts
Sales Adjustments
Customer Info
Marketing
Adjustments
Causal Factors
Special Prod and Prom
Consensus
Forecasting
Meeting
Action Plan
Activity Resp. Due Date
Consensus Forecast
Review forecast performance
Agree on adjustments to shipment history
Review special products and promotions
List deviations from forecast and their causes
Review, by exception, deviations between
forecast methods
Agree on “one number”
© 2019 - MetaOps, Inc.
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19. Case Study – Planning Demand for
“Un-Plannable Demand”
• Challenge – Expendable Packaging used for
Automotive Parts – no usable history or
customer demand forecast; Use it:
– When you run out of returnable
containers shipped back by customers
– When packing infrequent orders for
service parts
– Building banks of inventory to manage
ECNs or long PM tasks on equipment
and tooling
• Pallets, wood posts, corrugated boxes and
inserts, plastic bags
• Consumption-based triggers to replenish
within vendor lead-times
© 2019 - MetaOps, Inc. 19

20. Executing Demand Management
• Simple, low variability of demand situations
can be as simple as spreadsheets and
Kanbans (Consumption-based triggers
within lead time to replenish) – Services,
some retail, routinely used items like
supplies
• Material Requirements Planning / ERP for
Make or Engineer-to-Order products –
requires forecasts, bills of materials and
lead time data to function
• Advanced, cutting-edge integrations of
technology across the entire value stream
are possible
© 2019 - MetaOps, Inc. 20

21. 03 Integrated Planning &
Operations Digital
Assistants
10x Agility
Autonomous Planning
10x Productivity, Expertise
Digital Assistants for Key Roles
Enterprise Grade Siri / Alexa
01 AI-Powered Enterprise
Knowledge Graph
Big Data Store
Graph Data Model
Intelligent Algorithms
❏ M/L Analytics
❏ D/S Match Algorithms
❏ Aggregation & Disaggregation
❏ Bi-Directional Propagation
❏ Scenario Planning
❏ Post Game Analysis
02 Data Sensors
Enterprise & Market Data
Structured & Unstructured Data
Real Time & Batch Data
Digital Transformation Platform
DEMAND
SENSING
REVENUE PLANNING
DEMAND
PLANNING
LONG RANGE
PLANNING
ANNUAL
OPERATING PLAN
SUPPLY CHAIN
ANALYTICS
DEMAND / SUPPLY
MATCH
ACCOUNT
PLANNING
INITIATIVE
MANAGEMENT
NPI SALES & OPERATIONS PLANNING LOGISTICS PROCUREMENT
SUPPLIER
COLLABORATION
INTEGRATED DEMAND MANAGEMENT
INTEGRATED BUSINESS
PLANNING
INTEGRATED SUPPLY MANAGEMENT
for Integrated Planning & Business
Operations
Network Graph Relationships
Web Scraping Natural Language and Image
Processing
Connected
Excel
IOT / Edge APIs Realtime & Batch APIs
Market Knowledge Models Demand Knowledge Models Supply Chain Knowledge Models
Sales
Operations
Market
Analysts
Account
Sales
Brand
Marketing
Sales
Finance
Demand
Planners
Sales
Finance
Executives
D/S Match
Planners
Network Design
Analysts
Logistics
Ops
Production
Ops
Procurement
Ops
Suppliers
+
Competitor
Intelligence
Channel
Intelligence
Customer
Intelligence
Market
Size
Market
Share
Channel
InventoryPOS
Assortment
Plans
Sales
Plans
Initiative
Plans
Demand
Forecasts Orders
Pricing
Plans
NPI Plans
Demand
Priorities
Supply
Allocation Plans Distribution
Plans
Resource
Plans
Supplier
Intelligence
Commodity
Intelligence
Make
Plans
Inventory Plans
Procurement
Plans
Competitors
Consumers
Online
Retailers
Distributors
Market
Regions
Initiatives Budgets
People
Sales Accounts
Products Ship Tos
DCs
Factories
Material
Hubs
Supplier
Nodes
B2B
Websites Social Media
Email
PPT
Excel IOT
Sensors DW
ERP CRM PLM
Hierarchy Graph
Relationships
Make Activities
Source
Activities
Move
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© 2019 - MetaOps, Inc.
Image provided by
O9 Solutions, Inc.

22. SCOR® Balanced Scorecard
SCOR is a Registered Trademark of ASCM/APICS
Conducting a Performance Review
© 2019 - MetaOps, Inc.
22

23. SCOR® Metrics
SCOR is a Registered Trademark of ASCM/APICS
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© 2019 - MetaOps, Inc.

24. Balanced Score Card Concept
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© 2019 - MetaOps, Inc.
Supply Chain Balanced Scorecard - Aircraft Parts and Consumables
Key Performance Metrics History
Strategic Attribute Metric Actual Parity Advantage Superior Target Gap
Reliability & Safety Percent of Orders Delivered in Full Enter Enter #VALUE!
Delivery Performance to Supplier Commit Date 0
Documentation Accuracy - Supply Chain 0
Flights Missed % - Aircraft not Available due to
Supply Chain Cause
0
Percent of Orders - planned - vs. rush, hot, AoG 25% 10% -0.15
Stock-outs frequency per month, warehouses 0
Supply Chain Cause Safety Incident Rate (Escapes
impacting safe flight ops.)
0
0
Responsiveness Order Fulfillment Cycle Time (Lead times) Enter Enter Enter Enter #VALUE!
Deliver to Install Cycle Time - AoG Status Aircraft
(mean time)
0
Ratio of Rush Orders to Normal Replenishment 0
Source Cycle Time - Internal (request to receipt
hours)
0
Source Cycle Time - External (request to receipt
hours)
0
Source Cycle Time - new items identified (days) 0
Source - Return Cycle Time - Rotalbles ~ Repairables 0
0
Agility Upside Supply Chain Flexibility - Internal Enter Enter Enter Enter #VALUE!
Upside Supply Chain Flexibility - External 0
Upside Supply Chain Adaptability (volume spikes in
flights made)
0
Cost Total Cost to Serve, Aircraft Parts Supply Chain - % of
Sales
Enter Enter Enter Enter #VALUE!
Transaction Cost per PO Line Received (Cost to
Source, receive and provide to Maint. Ops.)
0
Freight Cost Spend for Aircraft Parts and Supplies 5,700,000$ 5,200,000$ (500,000)$
Cost for Flight Ops Supply Chain - % of Sales (indirect
spend supply chain).
0
Cost to Mitigate Supply Chain Risk - (i.e., increased
field inventories)
0
Warranty Recovery Dollars Annually 5,000,000$ 7,000,000$ 2,000,000$
0
Asset Cash-to-Cash Cycle Time - Parts Days Supply Enter #VALUE!
Inventory Value on-hand, Turn Over Ratio 0
0
Balanced Perspective Performance GoalsBenchmark
CustomerFinancial

25. If you are an organization
looking to:
• Plan a new Procurement / Sourcing /
Supply Chain Project
• Reduce risks of failure in Projects
• Develop skills – leaders and
procurement workforce
• Drive enterprise value through best
practices in Supply Management
• Then…
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© 2019 - MetaOps, Inc.

26. Two Ways to Engage - #1
One (1) Day Appraisal
• One Expert for a day will provide
– Strategy review or Strategy Execution Plan
– Identify top 3 to 5 opportunities/gaps to
increase your execution plan
– Roadmap to close the gaps to superior strategy
execution
– Estimates of value/ROI results to expect
Value $4000
Expenses Only*
When scheduled by November 27, 2019
for a time by December 31, 2019
(*Travel/Food/Lodging)
26

27. Two Ways to Engage - #2
Two (2) hr. Think Tank Session- Remote Council of
Experts
– 1 to 2 Experts meet with you online
– Help your Leadership team get clear on the
measures of effective strategy execution
– Or any other pressing matter you are grappling
with
– Develop a go forward plan
Value $600 to $1200 ($300/hr./Expert)
FREE
When scheduled by November 27, 2019
for a time by December 31, 2019
27
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28. Choose One
1. 1 Day Appraisal (Expenses Only) (Value $4000)
– 1 MetaExpert in 1 day
– Cost is Expenses Only – Travel/Food/Lodging
2. 2 hr. Think Tank Session (RCoE) (Free)- Value $600-$1200
– 1 to 2 MetaExperts
– Gather online to help your Leadership team get clear on
strategy performance gaps and develop a go forward plan to
remedy.
Take the first step:
Bit.ly/ExecutiveChat (Ron Crabtree)
Offer good till September 6, 2019
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29. 29
What we covered today
© 2019 - MetaOps, Inc.
• Understanding Demand Management
Basics
• Planning a Demand Management
Process
• Execution of Demand Management
• Conducting a Performance Review of
your Demand Management Process
(and KPIs)
• Q&A Forum

30. Your Interests – Next
Webinar
• This is a BIG Topic!
• Not possible to delve deeply
into all aspects of Demand
Management in 45 minutes
• Please use the question tool
now to share with David
Millington what you’d like to
delve into more deeply based
on the topics covered today
© 2019 - MetaOps, Inc.
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31. Questions
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32. Thank You
For More information:
Ron Crabtree, CPIM, CIRM, CSCP, MLSSBB, SCOR-P, CSCTA
CEO and Master Architect
p. 248-568-6484
rcrabtree@MetaOps.com
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© 2019 - MetaOps, Inc.

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© 2019 - MetaOps, Inc.

35. SCOR® Metrics
SCOR is a Registered Trademark of ASCM/APICS
Metric: RL.1.1 Perfect Order Fulfillment
Definition: The percentage of orders meeting delivery performance
with complete and accurate documentation and no delivery
damage
Calculation: [Total perfect orders] / [Total number of orders] x 100%
Data
collection:
Data are primarily taken from deliver and deliver enable
process elements
Discussion:
An order is perfect only if ALL L2/L3 metrics are perfect. An
order must be on-time AND in-full AND right condition
AND right documentation
Diagnostic
level 2
metrics:
• RL.2.1 Percent of orders delivered in full
• RL.2.4 Perfect condition
• RL.3.19 Percent of orders/lines received defect free
• RL.3.24 Percent of orders/lines received damage free
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© 2019 - MetaOps, Inc.