Building an Optimized Demand Planning Process Flow
Demand Planning Process Flow Step-by-Step
QueBIT’s approach to demand planning and forecasting is rigorously systematic. Each step in the process builds on the preceding steps and informs the steps that follow. This ensures consistent execution for optimum results.
The four steps in QueBIT’s approach to forecasting incorporate real-world data and conditions, such as weather data, as well as advanced analytics techniques. Together, these constitute an optimum workflow.
Create Master Data for Planning
Define the master data structure and all the characteristic combinations of the data. You also designate the source containing the data itself.
Because the quality of your input data places an upper limit on the quality of the forecasts generated, data cleansing is an integral part of the forecasting process. By removing duplicate data, inaccurate or incomplete information, and improperly formatted data, you can improve the accuracy of forecasts.
Determining Demand Drivers
Demand drivers are a function of your industry. For example, demand in the travel industry (i.e. demand for airline flights or hotel rooms) generally peaks during holiday seasons. Depending on your market, demand drivers may include:
- Weather data
- Pricing data
- Macro-economic effects
Load Historical Demand Data
Historical demand data can be granular, down to the level of unit demand by SKU and location. By itself, this data is not an adequate predictor of future demand. In combination with advanced analytics, though, it strengthens the accuracy of forecasts.
Generating Statistical Forecasts
QueBIT applies a number of advanced statistical and machine learning forecasting techniques that incorporate data mining and game theory to generate multiple models.
Advanced Analytics – Demand Forecast
Advanced analytics generate forecasts of unit demand by SKU, location, or other required parameters. These forecasts inform supply side planning and management with the goal of allowing your business to minimize materials, transportation, and related costs.
The forecasts serve as the basis for real-time planning. Customers’ expectations for up-to-date product and pricing information are proliferating, as are eCommerce solutions. Businesses must be able to anticipate change, understand its impact, and follow the most profitable course of action available—all in real time.
Real-time planning informs all of the following:
- Revenue Forecasts
- Supply Chain Plan
What-if Scenario Testing
What-if modeling allows you to determine the likely outcome of specific operational changes. For example, you could see the anticipated effect of increasing the marketing budget by a specific percentage or implementing particular discounts or offers.