DEMAND MANAGEMENT

Stepan Baboglo

2010503092

What do we mean by demand? Demand is the total number of requests for a

resource. Demand management is all about making

choices.

Request: an act of asking politely or formally for something

Demand Management The demand management

process captures all work proposals in one place, guides the proposals through a multistage governance process, helps customers make decisions about which proposals to approve, and tracks progress on project execution until the work is completed.

Approve: officially agree to or accept as satisfactory

Proposal: a plan or suggestion, especially a formal or written one, put forward for consideration by others

Traditional Demand Management…

Covers how a firm integrates information from and about its customers, internal and external to the firm, into the manufacturing planning and control systems.

How a firm integrates information from its customers with information about the firms goals and capabilities, to determine what should be produced in the future.

Demand Management

Demand Management is based on “forecast” and plans.

In DM, forecasts of the quantities and timing of customer demand are developed. What do we actually plan to deliver to customers each period is the output of the process.

Demand management is

The process of ensuring that market demand and the company’s capabilities are in synchronization

Recognizing all demands for products and services to support the marketplace.

Doing what is required to help make the demand happen

Prioritizing demand when supply is lacking. Planning and using resources for profitable

business results

Optimize business processes for demand fulfillment and improve efficiency of services delivered…

Complete projects on time

Reduce costs Increase client

satisfaction Assess the

availability and skill sets of resources

Supply and Demand Through an Integrated Solution

Manage business demand and customer satisfaction using a defined and repeatable approach.

Collaborate with business counterparts using a transparent decision-making process.

“Organizations that are switching

to the demand-supply modelenjoy significant gains in

productivity and prioritizationof investments.”

McKinsey Quarterly, September 2006,“Splitting Demand From Supply in IT”

by David Mark and Diogo P. Rau

Demand management components

Goal customer service levels New product introductions Distribution resource planning Customer order entry and promising Sales and marketing plans Inventory targets Product commitments Interplant shipments Demand forecasting at item and aggregate levels

COMPONENTS OF DEMAND

Demand that adds value is desirable and met Demand that adds value, is desirable, but

cannot be met Demand that does not add value,

undesirable, and should not be met.

IMPORTANT ISSUES

Market segmentation Customer classification Product ranking

Market segmentation

Growth Commonality of offering needs Response to brands Strategic importance Financial attractiveness

Customer classification

Customer size Customer technology Company sale/ company share Business quality Importance to the value chain Opportunities for survival Willingness for alliance

Product ranking

Profitability Customer’s value for product Competitive offerings Patent position Asset capability

WHY FORECAST AND PLANS ARE IMPORTANT

A manufacturing manager cannot be held responsible for not getting a forecast right.

A manufacturing manager can and should be held responsible for making their plans.

WHY FORECAST AND PLANS ARE IMPORTANT

Typical demand management phases are create, select, plan, and manage.

Demand management is a concept that integrates project proposals, portfolio analysis, and project management through workflows.

WHY FORECAST AND PLANS ARE IMPORTANT

The goal of demand management is to enable customers to propose, view, categorize, prioritize, select, and track projects within their organization.

Demand Management is based on a forecast and planning because a manufacturing manager cannot be held responsible for not getting a forecast right.

Manufacturing manager can and should be held responsible for making their plans.

Following figure shows the four phases of demand management

and how they fit together.

BENEFITS OF DEMAND MANAGEMENT…

Control over product availability Confidence of sales force in ability to deliver

product Smoother product introductions Improved ability to respond to change A single game plan, based on the same set of

numbers

BENEFITS OF DEMAND MANAGEMENT…

With the Demand Management, organizations can streamline approval processes, while ensuring that Information Technologies (IT) priorities are aligned with the broader business objectives and that approved initiatives will deliver maximum business value.

Streamline: make (an organization or system) more efficient and effective by employing faster or simpler working methods

Priority: a thing that is regarded as more important than another

Thanks for listening…..