Are you struggling to balance demand and supply in your supply chain operations? Discover how SAP Demand & Supply Planning can transform your business.
How to Align Demand & Supply Planning
Demand Planning & Supply Planning, at its core, is the art and science of aligning your business operations to customer demand. Demand management differs from demand planning. It refers to the management of demand that operations uses for their supply planning by operations. Demand-driven planning requires trust and transparency in the assumptions and the understanding that a forecast is imperfect by its definition. When we are working in a demand-driven environment, the focus is on flow. The efficient flow of relevant information enables the efficient flow of materials.
To achieve the goal of alignment of supply with demand, you must trust the demand signals to drive operations. Only when the whole organization believes and works together to meet demand can you transform into a genuinely agile organization. Becoming truly demand-driven is core to the journey of business maturity and evolving into a streamlined, data-driven, agile enterprise.
Often, companies are out of alignment with what they believe they are, how they operate, and how they set-up their ERP system. SAP requires us to be definitive in setting rules in the system that mirror how we wish to behave and run our business. Reveal's value-driven methodology helps organizations define what they are and optimize the procurement and production process to meet demand by embracing a single source of truth.
Effective Demand & Supply Planning
Effective planning strategies are vital for positioning the right supply at the right time. These strategies can include Make to Stock, Make to Order, or Assemble to Order models. Successful enterprises are clear about their operational model and manage their processes based on consistent data and assumptions, focusing on fulfilling actual demand rather than producing based on capacity alone.
When your demand and supply strategy functions optimally, you can transform data into actionable insights, ensuring on-time delivery to meet demand. Clear expectations empower team members to take proactive actions based on realistic and well-aligned plans.
Demand & Supply Planning Challenges
Misalignment between supply and demand often leads to inefficiencies, such as excess inventory or service issues. Teams may revert to producing based on assumed needs rather than actual demand, resulting in waste and reactive decision-making.
If you have service issues, many exceptions (breakdowns), inventory stock-outs, or excess inventory, chances are your planning strategies are not aligned. Businesses must understand the drivers behind their procurement and manufacturing needs. Regularly testing actual performance against forecasts—such as sales, production, and supplier delivery—can help combat volatility. Planning should evolve into a cross-functional activity, aligning processes across teams and promoting transparency.
Transforming Your Business: The Impact of Aligned Demand and Supply
By aligning processes and fostering collaboration, businesses can enjoy the rewards of an agile supply chain: shorter lead times, optimized inventory, reduced waste, and improved communication across all functions.
Whether optimizing supply chain performance or implementing new SAP functionalities, Reveal assists organizations in enhancing internal processes, educating users, and leveraging SAP effectively. By shifting from transactional to information-driven management, companies can achieve significant improvements in agility, service levels, cost efficiency, and inventory management.
