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Demand Planning with SAP APO – Execution
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15.04.13 17:17
AvijitDutta 
Demand Planning with SAP APO – Execution

Demand is about requirement and therefore it needs to be met. Planning is always about future and therefore, it is unknown. Hence, demand planning is about future requirement. Extending this definition to the world of business, demand planning means customer requirement projections in advance. To meet customer requirements it is essential to have a scientific or a mathematical approach. However, the element of ‘unknown’ in demand planning entails ‘mysticism’. Hence, a single approach or only a quantitative approach towards demand planning does not suffice.

Demand planning as a process not only deals with a cut throat statistical forecasting methods based on past sales data but also involves variety of other methods. Different methods could range from taking into account factors which directly influences the demand to factors that indirectly influences the demand e.g. macro-economic factors, societal factors, and geo-political factors.

However, it may not be possible to quantify all influencing factors. Hence, we depend on qualitative factors e.g. expert opinions, group consensus, and experience.

It is true that past sales data, experience, expertise, knowledge of influencing factors do impact demand planning yet there are cases where we encounter new products, new factors etc. How do we deal with such cases? Well, for such cases, we delve into the complete lifecycle of the product. We devise mechanism to carry out demand planning for the varying behaviour of the product during every phase of the product lifecycle by taking reference to an analogous product.

Is it only the customer and known external factors that influence demand? Well, it’s not entirely true. Just as the customer influence the demand so also the organization carrying out demand planning itself. Organization can carry out promotions and can influence the demand not only for the newly launched product but also for existing products. Promotions can enhance demand as well as can demote demand of another product.

Eventually, demand planning is enriched to a consensus demand planning by taking into considerations inputs from multiple stakeholders and multiple constraints. Rigorous analysis gets into the process involving multiple sets of iterations, refinement, benchmarking etc. to bring about the acceptable demand plan also known as consensus demand plan. It’s only the consensus demand plan that is considered to execute supply planning in the network. In case of manufacturing organizations, demand plan is transferred to plants to execute production planning.

Demand planning implementation is an organization oriented activity hence its objective needs to be aligned with the goals, mission and vision of the organization. Often demand planning is carried out for limited scope of entities and are executed in a big-bang manner. However, in most cases, it is for wider scope and the learnings and experience gathered from one implementation is rolled out to series of other entities.

Multiple software based solutions help in executing the demand planning activities including: sales history loading, statistical forecasting, product lifecycle planning, promotion planning, and consensus planning for single entity implementation as well as for rolling out to multiple entities. APO DP happens to be a sophisticated tool from SAP that helps in both design and execution of demand planning process. It brings an organized approach, agility, and accuracy to the demand planning process.

Our book ‘Demand Planning with SAP APO - Execution’ goes on to build on the concepts and design explained in its prequel book ‘Demand Planning with SAP APO - Concepts and Design’ and explains demand planning execution steps. The book ‘Demand Planning with SAP APO - Execution’ demonstrates, in a pattern similar to its prequel book, the practical application of sales history data loading and statistical forecasting in the context of SCM and business. Furthermore, the book explains product lifecycle planning, promotion planning, consensus planning and integration of demand planning with supply planning as well as production planning. A concluding chapter focusses on implementation and template based global rollout methodology and provides rare insights into the demand planning execution.

The theme of our book ‘Demand Planning with SAP APO - Execution’ continues to be: a combination of ‘Theory’, ‘Business Relevance’ and ‘How to’ approach on demand planning in alignment with its prequel book.

Please read our book ‘Demand Planning with SAP APO – Execution’ to find more on this subject.

Learn more - http://www.amazon.com/Demand-Planning-SA...ekant+shiralkar

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multiple   implementation   factors   consensus   sophisticated   forecasting   considerations   geo-political   Planning   mathematical   statistical   product   Execution   macro-economic   manufacturing   organization   Execution’   requirement   Demand-Planning-SA   organizations