Demand management is a collective term used for processes involving the analysis and control of consumption levels of any goods or services. An analysis of demand is done to determine the optimal consumption patterns to minimize the total cost.
The company's policy and program interventions that influence demand are reflected in demand management outcomes, such as user options and competition. Managing demand effectively requires a "closed loop" in which data from demand plans is fed back into the planning process to enhance predictability. Demand variability is becoming a more significant issue than the variance in forecasts and plans.
Managing demand is a prerequisite for supply chain management (SCM) . The concept of supply chain management refers to a company's procurement, development, manufacturing, and delivery activities, including moving materials, services, and goods. Bringing products to market and building products is enabled by the supply chain, which consists of a complex, interconnected system. The supply chain of another business may be dependent on a company. As such, it becomes increasingly important to predict demand.
Across all departments – from sales and marketing to logistics – companies need to build reciprocal relationships with their suppliers and customers. Finance teams must optimize demand forecasts, and executives must show buy-in at the top.
With real-time analytics and insights, enterprises can respond and react faster to issues, improving their ability to find and isolate business risks. Predictive analytics is crucial for accurate forecasting and planning in a dynamic and interconnected world powered by artificial intelligence, machine learning, data mining, and predictive models.
Read more about GEP's demand planning & forecasting software.