Demand management is the process that balances the customers’ requirements with the capabilities of the supply chain. With the right process in place, management can match supply with demand proactively and execute the plan with minimal disruptions.
The process is not limited to forecasting. It includes synchronizing supply and demand, increasing flexibility, and reducing variability. For example, it involves managing all of the organization’s practices, such as end-of-quarter loading and terms of sale which encourage volume buys that increase demand variability.
A good demand management process uses point-of-sale and key customer data to reduce uncertainty and provide efficient flows throughout the supply chain. Marketing requirements and production plans should be coordinated on an enterprise-wide basis. In advanced applications, customer demand and production rates are synchronized to manage inventories globally.
Demand management is the process that balances the customers’ requirements with the capabilities of the supply chain. With the right process in place, management can match supply with demand proactively and execute the plan with minimal disruptions.
The process is not limited to forecasting. It includes synchronizing supply and demand, increasing flexibility, and reducing variability. For example, it involves managing all of the organization’s practices, such as end-of-quarter loading and terms of sale which encourage volume buys that increase demand variability.
A good demand management process uses point-of-sale and key customer data to reduce uncertainty and provide efficient flows throughout the supply chain. Marketing requirements and production plans should be coordinated on an enterprise-wide basis. In advanced applications, customer demand and production rates are synchronized to manage inventories globally.
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