What is the Demand Planner’s Role in the S&OP Process? First of all, the Demand Planners is part of the Roles and Responsibilities of S&OP. Therefor, the Demand Planner assimilates data from multiple resources to develop an accurate set of finished goods and raw material needs. As a result, the Demand Planner will aim to meet all customer demand.
Where Does a Demand Planner Sit in the Organization and Why?
The demand planner’s role in the S&OP process typically places him/her in the Operations Department. Therefore, they frequently serve as a link between a company’s Sales and Marketing Organization and their Manufacturing Organization.
Demand Planners Bridge Gaps Between Sales and Operations
Demand Planners have a clear view of the entire supply chain. They can see orders on the books, production schedules and raw material supply. Their analysis can reveal potential bottlenecks in the system due to a mismatch between manufacturing capacity and customer demand. Depending on the length of a company’s production cycle, Demand Planners may be looking at balancing production and capacity for many months into the future. When the possibility of a product shortage due to demand change is noticed, the Demand Planner can proactively inform both Manufacturing and Sales. It will then allow sufficient time to reach a solution before the facing a disruption in delivery schedule to customers.
Factors to Consider When Creating a Demand Plan
Creating an effective demand plan goes beyond just merely reviewing current orders and listening to sales forecasts. Other elements to incorporate into a demand plan include:
- A statistical forecast based on historical sales
- Anticipated demand fluctuations based on customer intelligence provided by Sales
- Could include new competition to either customers or suppliers
- Known industry factors like anticipated supply shortages due to a major supplier experiencing production disruptions due to a natural disaster
Empowering Demand Planners to Help Improve the Bottom Line
With a well-run S&OP process in place, Demand Planners can feel empowered to proactively make suggestions that will improve the company’s profits. For example, if he or she sees company inventory that is aging due to excess supply, it is part of the demand planner’s role in the S&OP process to suggest to Marketing that a promotion be developed that will help move that inventory. Keeping inventory cycling through the organization in a rapid fashion helps optimize cash flow.
Learn more about Roles and Responsibilities of S&OP: