Order from us for quality, customized work in due time of your choice.
Introduction
The department of demand planning is one of the essential departments in a corporation. This study tries to determine the ideal strategy to operate the demand planning department to provide a smooth flow of business and a tremendous financial impact for a company. It attempts to build a road map for the faultless functioning of the demand planning department to realize a long-term financial benefit. Therefore, the demand planning department allows corporations to meet their customers product demands while avoiding supply chain disruptions.
The primary obstacle highlighted is the instability of market demand during the epidemic. The unpredictability of consumer behavior makes it difficult for all business units to provide accurate and timely feedback to the Demand Planning department (Marak and Pillai, 2018). These obstacles result in estimates that are susceptible to mistakes. During the conversations, the communication between Demand Planning and Sales has been highlighted as the primary bottleneck (Shen and Sun, 2021). Despite the companys many efforts to bridge the communication gap, a comprehensive strategy is lacking to facilitate the rapid and correct delivery of information from Sales to Demand Planning.
Demand planning optimization involves the activities that help businesses meet their clients demands timely. The existing literature explores the factors that companies should consider when optimizing demand planning for a positive financial effect. The firms are encouraged to implement exception-based forecasting, incorporate dynamic time frames, eliminate dysfunctional systems, and define strategic customer service levels. Optimization of demand planning is financially beneficial to companies since it reduces investment requirements. Therefore, demand planning optimization helps the companies meet customer satisfaction and reduce costs through improved services.
Unpredictable consumer behavior is mitigated through demand planning to reduce supply chain disruptions. While demand planning may be costly and time-consuming, improving its operation and procedure is essential for a tremendous financial impact, customer happiness, and corporate success. The study aims to investigate the many accessible operation techniques for the department of demand planning and to determine how technology might be integrated into demand planning to provide excellent results.
Literature Review
Summary and Synthesis
Demand planning optimization is a broadly discussed concept by various scholars. According to Kazmi and Ahmed (2021), demand planning involves the supply chain management process of forecasting the demand for products among existing and potential customers. Various factors contribute to the enhancement process of the supply chain activities among retailers and suppliers (Morcillo-Bellido, J. and Duran-Heras, 2020). Demand sensing and managing practices create dynamic distribution capabilities that help satisfy customers (Kazmi and Ahmed, 2021). Similarly, Bellisario and Pavlov (2018) argue that supply chain performance has an insignificant relationship with demand management practice. Therefore, Kazmi and Ahmed (2021) encourage companies to prioritize supply chain performance for a competitive advantage.
Hannila et al. (2020) explore product management portfolio as an aspect of the demand planning among companies. The authors claim that data-driven and fact-based product portfolio management is significant in optimizing the Demand Planning Departments operations within the company. Moreover, Uzsoy, Fowler, and Mönch (2018) opine that product portfolio management can be internalized for strategic fit, value maximization, and portfolio balance. Statistical forecasting is another aspect of demand planning among companies (Hofmann and Rutchsmann, 2018). Feizabadi (2020) explores the significance of technological integration for demand planning optimization. The author suggests that many companies suffer from demand information distortion, leading to inefficiency. However, according to Yang and Yu (2019), the use of advanced technologies such as machine learning can help companies become more efficient and improve their performance.
Trade promotion management is the third aspect of demand planning. According to Bambal, Kumar, and Abraham (2021), trade promotion management helps firms to connect with their customers. The trade promotions make products more accessible to end customers and reduce the inventory levels. Additionally, the authors explore the optimization model of demand planning that provide price elasticity value (Bambal, Kumar, and Abraham, 2021). Therefore, according to the existing literature, the demand planning optimization activities should involve all factors that affect trade promotion, product portfolio, and statistical forecasting management (Yu et al., 2019).
The effectiveness of a Demand Planning Department is not limited to trade promotion, product portfolio, and statistical forecasting management. Therefore, several authors have developed practices that firms can incorporate for effective demand planning. The process is described as multifaceted, involving the right tools and information (Bettiga et al.,2018). According to Christiansen, Haddara, and Langseth (2022), implementing the right software help companies handle forecasting nuances. However, Francisco and Swanson (2018) reiterate that handling forecasting nuances should not be the only factor to consider when adopting an ERP system. Instead, the companies should consider the user-friendliness and durability of the software (Yang, 2021). Therefore, the existing literature explores the demand planning optimization aspects and best practices for a positive financial change.
Interpretation and Analysis
Demand Planning
Demand planning plays a significant role among companies since it allows preparation for future customers needs. The process involves the execution of the available resources and utilization of consumer data to predict future market performance. Corporations utilize complex tools and software to make conclusions about the possible changes in the demand for goods or services (Awanga, 2018). While many businesses depend on simple economic forecasting to make organizational changes, technological integration such as automation has helped many companies make accurate predictions (Bettiga et al.,2018). The existing literature explores the impact of demand planning on various organizational activities such as decision making, work efficiency, emergency responses, and strategic value.
Demand Planning and Decision Making
A companys supply chain is a multifaceted department that involves many stakeholders ranging from the suppliers to the end-users. Many companies objectives that the suppliers must meet to ensure customer satisfaction. For instance, firms with the mission of environmental sustainability will only involve suppliers who are environment friendly. Demand planning and forecasting allow the companies to interpret and prepare for future product demand changes (Marak and Pillai, 2018). The utilization of technology to forecast future consumer behaviors allow the companies to make decisions that greatly impact the supply chain (Bettiga et al.,2018). Therefore, if the demand planning and forecasting show an increased demand for a specific product or service, the company is likely to encourage more supplies. Moreover, the company can make decisions that affect the human resource capacity, among others. Therefore, demand planning is significant to a firms decision-making processes.
Demand Planning and Efficient Work
Efficient work involves the production of goods and services that satisfy consumers and that are profitable to the business. Overproduction may lead to the wastage of economic resources among companies. Therefore, many businesses need information on which part of the business and departments to modify for efficient service delivery (Xie and Wang, 2020). Statistical forecasting plays a significant role in providing data on the product or service performance. Moreover, the data on future product performance help companies adopt efficient processes (Sheng et al., 2021). For instance, if the firm realizes that a specific product is likely to be on-demand in the future, new marketing mechanisms can be developed to accommodate as many consumers as possible. The demand planning and forecasting enable the businesses to improve service or product delivery through efficient work.
Demand Planning and Emergency Preparedness
The global market is dynamic and subject to changes as affected by internal and external business environments. Although companies can utilize the data on the consumers to interpret future product or service performance, unprecedented occurrences are hard to forecast (Sheng et al., 2021). Consequently, there is a need to prepare better for such unprecedented events. Complex demand planning programs incorporate all the internal and external environmental factors to predict future product demand (Bettiga et al.,2018). Consequently, the businesses are equipped to avoid possible emergencies. Furthermore, companies with proper demand planning are profitable and sustainable (Shambaugh, 2018). Therefore, there is a high likelihood of such businesses prospering amidst natural pandemics. Therefore, demand planning can help businesses to react and process unpredictable events.
Demand Planning and Strategic Value
Strategic value involves the purchasers capacity to pay for the business above the market value. Customer satisfaction is a crucial factor that motivates clients to purchase specific products from a firm of their choice. Since customer satisfaction is dependent on the companys ability to produce quality and effective services, many firms invest in activities that promote productivity (Bettiga et al.,2018). The demand planning operations consider all the factors that affect the purchase rate of specific products (Awanga, 2018). For instance, if a companys reputation is the greatest inhibitor of its product demand, the management will adopt mechanisms that enhance excellent brand image and reputation. Demand planning helps companies improve their strategic value in the market.
Conducting Demand Planning
Supply Chain Forecasting
Supply chain forecasting stimulates all other business actions. In addition, supply chain forecasting enhances SCM and enterprise planning and decision-making (Balachandra, Perera, and Thibbotuwawa, 2020). High-performing firms use their numerical value to judge capacity development, resource allocation, growth, and process scheduling (Seyedanand Mafakheri, 2020). Through supply chain forecasting, the businesses can identify possible business hurdles in the product and service demand. Consequently, the information can be adopted to protect the business and enhance efficiency. Although the existing literature on supply chain forecasting explores its importance, little research has been done on the proper technology to be adopted for supply chain forecasting. Moreover, the existing literature fails to address unpredictable situations such as natural pandemics.
Inventory Operations Sales
The inventory operations sales method reduces OOS by balancing supply and demand. SI&OP helps firms estimate market demand for their goods and services (Shubbar and Smith, 2019). The company should choose what to introduce or retire, when to do so, and whether mature items have concerns (Greenstone, Mas, and Nguyen, 2020). Businesses should coordinate financial estimates. Combining commercial, marketing, and customer service data with market projections will increase prediction accuracy (Ãvila et al., 2019). The company produces time-phased inventory after synchronizing supply and capacity.
Demand-based production and delivery have financial consequences. Companies match sales, inventory, and production plans in the fourth phase. During this phase, the company identifies problems and develops solutions. After an Executive Sales Inventory and Operations Meeting, the SI&OP team delivers their plan to the organizations management to assess and finalize sales and production plans, followed by integration into tactical planning and execution systems.
MRP-on-Demand (DD MRP)
DDMRP models, plans, and controls supply chain information and material flow. MRP I was a time-phased priority-planning approach that aimed to identify material needs and arrange the supply to meet demand. MRP I was succeeded by MRP II as supply chain complexity expanded to provide additional functionalities such as finance (Awanga, 2018). A demand-driven supply chain must respond in real-time to changing consumer needs.
Businesses must examine inventory internally to safeguard it from the complicated and dynamic environment. A company should set buffer amounts for each SKU to handle lead times, variability, and SKU characteristics. New markets and changing demand patterns should be managed by reviewing buffer levels to reflect each SKUs market position.
Demand-Driven planning; by using demand-driven methodology with todays technology and software, businesses may build realistic ways, tools, and a routine system that supports better and faster planning and execution. DDMRP synchronizes changes inside the execution horizon. (Carr 2017) claims the Supply Chain Insights Global Summit included numerous topics.
Forecasting Supply Chain Demand
Demand forecasting reduces stock-outs, particularly with JIT or long-lead-time suppliers. Predicting demand helps arrange purchases to meet sales, saving time and money. Launch, marketing, and demand planning. Good demand forecasting improves inventory planning by synchronizing production orders to predicted demand (Puaka, Maksimovi, and Stojanovi, 2018). Reducing safety stock reduces expenses. Demand planning helps schedule maintenance (Brunaud et al., 2019). Productivity Effective S&IOP balances supply and demand. Enterprises must provide consumers with what they want when they want it. Forecasting helps the company meet client demands on time. MTO and ATO must be monitored via an organizations ERP system (Xu, 2020). This skill predicts sales and client demand using data.
Supplier Partnerships
Supplier collaboration is partners deliberate cooperation in maintaining a commercial relationship, per Huang, Han, and Macbeth (2020). Both parties may affect the relationships character. Balanced authority and shared future commitment are crucial. Conflict-prone relationships need conflict management. Partnership Sourcing limited says suppliers and buyers optimize economic advantage through solid and long-term partnerships. Collaboration works. War Supply chain players must collaborate to satisfy customers. According to Keers and van Fenema (2018), the supply chain is leaner. Partnership sourcings success is vital to both parties.
Manufacturers and suppliers must evaluate whether working remotely or on-site is suitable in an age of global platforms, systems, and standards. Your suppliers create a large portion of the global supply chain via OEM and outsourced. Essential supply chain management. Success depends on suppliers. Prioritize preventing recalls and building a structure for addressing them.
Supplier Participation Early
Wagner, Grosse-Ruyken, and Erhun (2018) defined ESI as early supplier involvement in product manufacturing by the buyer. They suggested Design, Procurement, Suppliers, and Manufacturing for ESIs implementation. Each component acts. Design should envision the product, assess its components, and define quality and performance objectives. Procurement negotiates to price and decides stock levels. Supplier responsibilities include improving quality controls, creating delivery objectives, and investing in R&D. Manufacturing entails debating product characteristics. Throughput, set-up, and efficiency goals.
Product design and purchase analysis are ESI successes. Price and conditions negotiations Lead times, stock levels, delivery standards, R&D, manufacturing, and production indicators. Early Supplier Involvement depends on supplier selection, according to Bettiga and Ciccullo (2018). Contacting complicated, high-value component suppliers early is critical. Creativeness and compatibility should guide your choice. Purchasing businesses must also integrate supplier connections over time. This integration may comprise shared training, trust, commitment, risk and reward sharing, and supplier participation in the customers product development team.
Management ignores essential elements. Top management commitment and cross-functional teamwork are crucial. Supplier connections necessitate cross-functional internal links (Koppenhagen and Held, 2021). Internal purchasing organizations must build procedures to choose and assess suppliers based on the proper criteria and form trustworthy, committed supplier relationships. Several companies have used Early Supplier Recognition (Taherdoost and Brard, 2019). Product development costs, lead times, and time-to-market were lowered via involvement, enhancing supply chain efficiency. DFIDs commercial advisor in Afghanistan urged vendors not to supply materials just because the buyer requested them (Grafham and Lahn, 2018). Its effectiveness and suitability. Suppliers should know. Unreliable suppliers will not be wanted.
Procurement
Supplier development improves cost, quality, delivery, time-to-market, technology, environmental responsibility, management competence, and financial sustainability. A buyer improves a suppliers performance and capabilities via supplier development. Due to commercial challenges, especially competitiveness, many companies have integrated suppliers into their networks. Companies that outsource non-core functions demand innovative, high-quality products at competitive prices. If the supplier does not fulfill expectations, the buyer will produce the goods in-house, switch to a more competitive provider, or enhance the present providers capabilities. The buyer may review suppliers operations, give incentives to boost performance, establish competition among suppliers, and communicate directly with suppliers to boost their capabilities and performance. Both businesses must invest financial, human, and capital resources and exchange knowledge.
Deliver timely, sensitive data and a good performance evaluation. Supplier development may help integrate the supply chain, they argue. As outsourcing permeates the supply chain, vendors impact a companys quality, pricing, technology, delivery, and profitability (Myerson 2018). This correlation between suppliers and business success highlights the need to enhance supply-chain performance (Hallikas, Immonen, and Brax,2021). Identifying value-producing supply chain areas may boost long-term supplier performance.
The new economy demands a speedier company reaction. Teece (2018) claims shopkeepers usually provide advice. Companies might gain a competitive advantage by adding new suppliers, a more straightforward process, or a new standard (Bartley, 2022). Integrated supply-chain management maximizes internal and external capabilities (Webb 2017). Communication, training, and on-site help are development levers (Liu, Chen, and Yang, 2019). Remote or classroom training informs and innovates providers.
Cooperation-promoting. On-site assistance may also speed up new technology and management adoption. Sometimes selling frozen is quicker than fresh. When the buyer has management consulting knowledge, the provider may save money. On-site buyers confirm that all modifications meet company requirements.
Resupply Collaboration
CPFR uses trade partner input to plan and meet customer demand. Category management must be linked to supply chain planning and execution to boost availability and decrease inventory, transportation, and logistics costs. CPFR promotes trade synergy (Niemann, Kotzé, and Jacobs, (2018). CPFR saves inventory and improves transport and logistics planning. Include promotions and demand patterns.
Handle ample supplies to ensure product availability and estimate sales. CPFR needs product rationalization to optimize supply chain efficiency (Sheng et al., 2021). Product releases should meet customer demands and supply chain performance. The supply chain is affected by promotions, price, and stability (Martinez et al., 2019). Efficient replenishment reduces costs and maximizes value by simplifying producers and consumers physical and information exchanges. Xie and Wang (2020), suggest four ways to increase an organizations success through managing cooperation, positioning, and product strategies. Demand and supply management evaluates orders, shipments, and customer demands. Orders are generated, shipments are handled and received, items are racked on shop shelves, and sales are registered. Communicate with the team and analyze data. Hao, Xiao, and Chon (2020) believe CPFR does not require significant investments. Therefore, smaller enterprises may gain faster. CPFR can be measured using IT, but it is not a process. CPFR helps organizations forecast using the supplier and consumer data.
Supply chain costs are usually a large portion of a products pricing. 6-10% of sales went to essential supply chain expenditures (Benchmarking Success, 2016). Supply chain cost reductions boost profits. Rob offers three strategies to cut supply chain expenses. When a buyer puts or receives an order, these costs apply (Asl-Najafi and Yaghoubi, 2021). Preparing and handling bills, arranging the delivery, responding to customer questions, and monitoring progress raise costs. Following a process, such as order receipt through delivery and billing, may help estimate expenditures, but pipeline inefficiencies may mask additional costs (Sutawijaya and Nawangsari, 2020). Complex procedures and a lack of knowledge may increase transaction costs (Mora-Monge et al., 2019). E-commerce platforms may alleviate issues, but reducing costs may need human involvement.
Interruptions and duplication of effort may raise expenses if one process concludes before another. Unmatched product codes or pallet sizes must be noted and rearranged. Companies stockpile when demand and supply are unclear (Francisco and Swanson, 2018). Raw materials, WIP, completed products, and regional distribution center holdings may increase buffer stockpiles (Sheng et al., 2021). The stock has costs. Inventory costs money and drains working capital, reducing earnings (Vereecke et al., 2018). It increases inventory write-offs. Moore (2017) presents an operations and supply chain strategy as a cost-cutting potential that begins with reviewing customer service requests and adopting a demand-planning approach, followed by building client-segmented product movement processes. More straightforward methods improve corporate efficiency (Han, Chong, and Li, 2020). All supply chains attempt to offer what end customers need when they need it, and management plays a significant role in this. One thousand nine hundred twenty inventory regulations influenced Period costs and working capital. Routine Demand Forecasting reduces costs.
Logistics expenses Using manually updated, mathematical, or stochastic forecasting models lower forecast error, overstock, backorders, and the need for lateral or reverse logistics, maintaining inventory levels near to those needed to offer desired customer service (Berg 2018). Change the history to eliminate non-recurring promotions and out-of-stocks. Organizations should focus on records to reduce loss and dispersion. Adding SKU, retailer, and date to the data format improves future use.
Stocks
Demand and supply volatility is expected in all supply chains, making inventory optimization (IO) vital. IO sets minimal inventory targets depending on the planners restrictions (Mapowo, 2019). Organizations may create inventory goals without stated targets, rules of thumb, single-stage calculations, or multi-echelon software. Software estimates supply chain inventory targets (Turner, 2018). Standard inventory is expensive since it has not been shared.
Logistics Design
Limiting product handling helps organizations maintain cheap pricing and reliability. The customer base and goods supplied on one end and supplier location on the other define where stock is kept to service customers (Banerjee, 2018). Due to distant suppliers, service continuity requires more inventory (Biuki, Kazemi, and Alinezhad, (2020). A cost-effective distribution network minimizes product handling. Each supplier-client touch increases expense and error-or-damage risk (Hannibal and Kauppi, 2019). Inefficient network design may lead to increased handling, stock placement, and distribution center utilization. Poor service, expensive distribution costs.
Supply Chain Insecurity
Coordination and integration of a companys essential supply chain activities, from procurement through delivery. The most uncertain supply chain functions include planning, sales, sourcing, and customer service (Ali and Haseeb, 2019). Complex decision-making and period division are required for these jobs. Butt, (2021) suggests integrating several components to control supply chain uncertainty. These are considered in the CRM as well.
Critical Analysis of the Literature
Strengths of the Reviewed Literature
The reviewed literature provides sufficient knowledge on the overarching research topic. The literature explores all the aspects of demand planning among organizations. Therefore, the audience gets diverse information on how and what affects the demand planning among the organizations. Moreover, the literature is scientifically backed up and utilizes data from various respondents to give solid conclusions. The information gathered from the reviewed literature can be utilized in predicting performance in various business sectors. Furthermore, some of the reviewed work explores specific business sectors, making it easy to conduct further research. Therefore, the reviewed works provide enough information to answer the research questions.
Weaknesses of the Reviewed Literature
Although the reviewed literature provides sufficient information that is crucial in answering the research questions, the works exhibit various weaknesses. Some of the reviewed literature uses highly technical words, making it difficult to interpret the relayed information. Moreover, the majority of reviewed sources have repeated information on the importance of demand planning among organizations. Furthermore, the reviewed literature provides contradicting information on the research topic. For instance, while some sources propound that demand planning help businesses overcome unpredictive natural pandemics, some provide contrary information. Therefore, the sources weaknesses lead to various gaps in the literature that needs to be addressed in future studies on the research topic.
Conclusion
Key Findings
The reviewed literature exhibits five major findings that can be used to further develop the research topic. First, the research shows that demand planning allows businesses to make better decisions. Second, the reviewed literature shows that demand planning and forecasting help firms to work efficiently. The data collected from the forecasting stimulates the companies to avoid future hurdles through service improvement. Third, corporations prepare better for unprecedented events through demand planning. Fourth, strategic value among businesses is enhanced through consumer satisfaction. Finally, demand planning enhances effective business activities, influencing positive financial change.
Significance of the Key Findings in Filling the Gap in Literature
The findings helped in answering the research questions and meeting the study objectives. Moreover, the findings provide interesting information on the demand planning concept. For instance, the five findings show that all the business activities are dependent, and a variation in one activity affects others. For example, improper technological integration for future preparedness can lead to a bad brand reputation and negative financial changes, among others. However, the literature exhibits gaps in the literature: insufficient knowledge of the demand planning concept and overgeneralization of the research concepts. Therefore, future studies need to include less technical words and build on the existing literature to fill the literature gap.
Future Dissertation
The contradicting information on the impact of demand planning on business survival during the unprecedented natural pandemics, calls for a further study on the same. Therefore, a future dissertation could focus on the research topic demand planning and natural pandemics. The dissertation will explore how companies can incorporate various data to predict natural pandemics that may affect products or services demands. Therefore, the future research question would be What is the significance of demand planning optimization for natural pandemics preparedness?
Reference List
Ali, A. and Haseeb, M. (2019) Radio frequency identification (RFID) technology as a strategic tool towards higher performance of supply chain operations in textile and apparel industry of Malaysia. Uncertain Supply Chain Management, 7(2), pp. 215226.
Asl-Najafi, J. and Yaghoubi, S., (2021) A novel perspective on closed-loop supply chain coordination: Product life-cycle approach Journal of Cleaner Production, 289, p.125697.
Ãvila, et al., (2019) Design of a Sales and Operations Planning (S&OP) processcase study. Procedia CIRP, 81, pp.1382-1387.
Awanga, H. M., (2018) Demand Planning On Supply Chain Performance: A Case Study of FMCGs in Kenya. Doctoral dissertation. United States International University-Africa.
Bambal, A., Kumar, S. and Abraham, J. (2021) Design of Trade Promotion to Maximize Overall Supply Chain Profitability using Mathematical Optimization. 2021 9th International Conference on Reliability, Infocom Technologies and Optimization (Trends and Future Directions) (ICRITO).
Banerjee, A., (2018) Blockchain technology: supply chain insights from ERP. In Advances in computers. Elsevier, 111, pp. 69-98.
Bartley, T., (2022) Power and the practice of transnational private regulation. New political economy, 27(2), pp. 188-202.
Bellisario, A., and Pavlov, A. (2018) Performance management practices in lean manufacturing organizations: a systematic review of research evidence. Production Planning & Control, 29(5), pp. 367-385,
Berg Jr, R., (2018) An Engineering Management Approach to Electrical and Electronic Fulfillment Inventory Investment Improvement Planning at Low Cost. Doctoral dissertation. The George Washington University.
Bettiga, D. and Ciccullo, F., (2018) Co-creation with customers and suppliers: an exploratory study. Business Process Management Journal.
Biuki, M., Kazemi, A. and Alinezhad, A., (2020) An integrated location-routing-inventory model for sustainable design of a perishable products supply chain network. Journal of Cleaner Production, 260, p. 120842.
Brunaud et al., (2019) Inventory policies and safety stock optimization for supply chain planning. AIChE Journal, 65(1), pp. 99-112.
Butt, A.S., (2021) Strategies to mitigate the impact of COVID-19 on supply chain disruptions: a multiple case analysis of buyers and distributors. The International Journal of Logistics Management.
Carr, K., (2017) 26 Minutes to Understanding How Demand Driven Planning is Revolutionary. Manufacturing Works.
Christiansen, V., Haddara, M. and Langseth, M. (2022) Factors Affecting Cloud ERP Adoption Deci
Order from us for quality, customized work in due time of your choice.