Demand Planning
Demand planning is the process of forecasting and managing customer demand to ensure that products are available when needed—without overstocking or understocking. It combines data analysis, statistical modeling, market insights, and cross-functional collaboration to predict demand as accurately as possible.
Demand planning helps companies know what customers will want, when they’ll want it, and in what quantity—so supply chains can prepare accordingly.
SCT Advisory supports these critical elements of Demand Planning:
- Data Gathering – Collecting historical sales data, promotions, seasonality, market trends, and external signals (e.g., weather, economic data).
- Statistical Forecasting – Using models and algorithms to generate a baseline forecast.
- Collaboration – Involving sales, marketing, finance, and operations to refine forecasts based on business insights (e.g., new product launches, campaigns).
- Demand Sensing – Adjusting forecasts in near real-time with signals like POS data, online search trends, or order patterns.
- Exception Management – Identifying and addressing forecast errors, outliers, or sudden demand shifts.
With SCT Advisory’s guidance, Demand planning projects often deliver some of the fastest and most measurable ROI in supply chain investments, because even small improvements in forecast accuracy can cascade into huge cost savings and service gains.
SCT observes the following ROI opportunities from demand planning initiatives:
- Inventory Reduction (15–30%)
- Better forecasts mean less safety stock and fewer obsolete products.
- Companies free up working capital tied up in inventory. Example: A global CPG manufacturer cut finished goods inventory by $200M after implementing advanced demand planning.
- Service Level Improvement (3–10% increase in OTIF)
- Improved forecast accuracy → fewer stockouts → higher customer satisfaction.
- Retailers often reward suppliers with better shelf placement or reduced penalties for on-time performance.
- Lower Production & Procurement Costs (5–15%)
- Reduced reliance on costly “just-in-case” production runs.
- More efficient procurement and less reliance on premium freight. Example: An industrial manufacturer reduced rush orders and cut logistics costs by 12%.
- Waste & Obsolescence Reduction (10–20%)
- Especially valuable in consumer goods, fashion, or food & beverage.
- Better demand signals prevent overproducing products that expire, go out of style, or need markdowns.
Overall ROI:
Most companies we work with achieve 3–10x ROI within 12–24 months of implementing a modern demand planning system.
