In other words, it ensures that the company has the capacity and materials available to meet projected demand. ![]() It also gives them more information to provide their manufacturers, so the manufacturers can be better equipped to know what, when, and how much they’ll need to produce. Such planning enables companies to make sure they have the supplies ready to meet any expected demand changes. By using this multi-step process, companies are better prepared to anticipate various kinds of demand and factor those demands into the supply chain management process. The Importance of Demand Planning for a Successful Sales and Operation (S&OP) Strategyĭemand planning plays an integral role in creating an effective S&OP strategy. Most importantly, it can better inform your sales and operation (S&OP) process. When implemented, this useful tool can help companies more accurately forecast their revenue streams, match inventory levels with anticipated demand levels, and increase their products’ profit. ![]() Image Credit: wavebreakmedia/ĭemand planning involves using past demand patterns and forecasts in order to reliably predict demand for different items throughout the supply chain. Warehouse worker checking inventory in the demand planning process.
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