Demand Management is used to manage the demand of customer. Demand management focused on Logistics of Demand – what are the wants of customers, and how we contribute to get them fulfil. When operating a business, anticipating demand allows you to make plans for possible bottlenecks and volatility, which will enable you to respond swiftly and maintain the flow of the supply chain.
The concept of demand management comes after the supply chain management i.e., after managing the procurement and suppliers, but before the portfolio management. Demand management is used to bridging the gap between consumer demand, supply teams, inventory, marketing, and customer service.
Example
Here’s an example. Assume you’ve discovered that most women’s clothing lacks usable pockets. Although individuals frequently complain about it and memes about it go viral, this does not indicate that there is a market for this kind of apparel. At this stage, it’s just hearsay.
Retailers could use demand management to collect information and assess the demand for clothing with pockets in order to validate this information and possibly incorporate it into new items (i.e., add pockets). If they discover a demand, they can then devise a strategy for implementing their findings in their company. Designing an operational strategy to produce more clothing with pockets entails connecting with supply companies, coordinating with the design team, and relaying information to manufacturing departments.
Need of Demand Management
Demand Management helps to find the needs and wants of the customers and help manufacturers to create a plan to produce those products. Whether you are a service provider or manufacture, demand management can help you:
- Boost customer satisfaction: Increase client happiness by making sure clients receive what they truly desire.
- Reduce potential hinderance: Connect with responsible teams to be sure they can react to projected demand, and plan accordingly.
- Shape your operations: Demand management strategies can help you share operations so they are focused on meeting customer demand.
- Reduce costs and waste: You can adjust pricing and manage manufacturing more effectively once you have a better understanding of what customers require.
- Boost efficiency: Demand planning allows you to identify gaps and prepare for potential challenges.
Seven steps of the demand management Process
Demand Management is the best way to create project portfolios with the help of portfolio development. Demand management understands the market and the demand chain first, and following which it develop an operational strategy to meet the status of situation of market. In order to perform portfolio Management is the important to follow a seven steps process:
Review Past Data: Analyze past performance data to see what your customer were excited about in recent months and years.
Analyze the current Market: Reviewing and understanding of current market conditions and trends is helpful for getting competitive advantage to stand against similar products and services in your industry.
Estimate Demand: Use the collected data to estimate upcoming and future customer demand. This is demand forecasting, and it is the way to make decision about what to produce, when, and for whom.
Develop Demand Strategies: This step is about creation of demand strategy and action plan. Demand strategies preparation is result of brainstorming to find the way with the help of existing knowledge and incorporate them into daily operations.
Incorporate into business planning: Demand management is used to assist project and portfolio planning process. It is the guide to prioritize the task among upcoming work. The creation of initiatives and target outputs will impact by Demand Management in real time.
Coordinate with supply planning: Once the demand of product or service understood, then planning to achieve the target gets easy. Procurement team of the company assist in necessary supplies to meet projected demand. The longsightedness helps in understand the possible hinderances in supply chain and create potential solutions before they convert into a problem.
Optimize your process: The demand management process is continuous process. The focus in demand management will always be on optimization to get better demand management process.