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Demand Planning Detailed Process Steps

The DemandCaster Demand Planning process is the first major step in the monthly S&OP process. It can be executed with or without the 4-P process.

This article covers the basic demand planning steps of running and then manually editing the demand plan. It is a relatively easy process to manage however more advanced steps are provided as separate articles in the Demand Planning chapter.

The prerequisites to running the demand plan are building the Hierarchy and running the Pareto. The hierarchy may be automated and/or updated as needed. The pareto only needs to be run at the beginning of each planning period or if changes are made per the Pareto process article.

Run a New Demand Plan

  1. Running a new Demand Plan is initiated within the Demand and Supply Plan interface in the S&OP menu group.
  2. Click on "Run Demand Plan" to commence the forecasting process.
  3. You may also go to the Demand Plan interface by clicking [Demand Plan] in the progress bar.

This step runs the statistical forecasts.

Please note that if a demand plan value has already been edited, the statistical forecast will not override the edited value.

Select Forecast Type and Level

  1. Forecast Type: Select either top-down or middle out to select the type of aggregate forecasting process.
    1. Top-Down superimposes the shape of the aggregate forecast down to the item by a distribution percentage as defined in the Pareto process. For example is an item makes up 20% of the overall history of the customer, the items forecast will be 20% of the overall customer forecast. Middle-Out performs a proprietary blended forecast of top down and bottom up.
    2. The Middle-Out approach is the best of both worlds since the overall shape of the aggregate forecast is combined with the shape and trend of the item level forecast. Though the middle-out approach takes longer to process since it is running twice the numer of forecasts, we recommend it due to it generating the best possible forecast.
  2. Select Forecasting/Aggregation Level: This option sets the level where the statistical forecast is applied. The levels are established within the Planning Hierarchy level creation process. The objective is to set a level where the grouping is significant enough to generate a meaningful statistical forecast at an aggregate level i.e. defines seasonality and trend. When selecting top-down, the forecast is generated at the level selected and distributed down. Selecting Middle-Out changes the level selection to an Aggregate level. As an option selecting Top-Down forecast type and the item level generates a forecast at the lowest level of the hierarchy. This is useful when the item and the channel are one to one.
  3. Run Revenue & Statistics: Click to update the revenue and error calculations. Should be run at the start of each planning period or after all the demand plan edits are finalized.
  4. Generate: Click "Generate" to commence the forecasting process. The process runs the statistical forecasts, drives the forecasts down to the item level, sums up forecasts at each level of the hierarchy, calculates sales dollars and average sales prices as well as performance metrics such as Error, MAPE, and WMAPE to name a few.

The time required to generate the demand plan is dependent on numerous factors including the number of customers, levels, and items being forecasted.

The last demand plan type that was run is retained in the Demand Plan settings to make it easier to repeat the same setup as before.

Select Level to Edit as Required

Upon completion of Demand Plan analysis, the user should review the results and edits the demand plan results as required. This can be done at any level of the hierarchy by selecting the level in the drop down.

There are two methods to edit a demand plan:

  1. In the user interface as described in the article Editing Demand Plans
  2. As an uploaded file as described in the article Downloaded, Editing and Re-uploading a Demand Plan
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