Demand Planning

What Is Demand Planning?

Demand planning is the broader business process of forecasting customer demand and translating that forecast into actionable plans for inventory, production, and supply chain resource allocation.

How Does Demand Planning Work?

Demand planning takes the output of demand forecasting and combines it with business inputs, sales targets, promotional calendars, new product launches, to produce a consensus demand plan that other functions (procurement, production, logistics) build their own plans around. It typically involves cross-functional collaboration between sales, marketing, finance, and supply chain teams to reconcile different views of expected demand.

Demand Planning vs. Demand Forecasting

Demand forecasting is the statistical/analytical process of predicting future demand. Demand planning is the broader business process that takes that forecast, adjusts it with business judgment and cross-functional input, and turns it into an actionable plan the rest of the organization executes against.

Why Demand Planning Matters

A well-run demand planning process aligns the whole organization around a single, agreed-upon view of expected demand, reducing the disconnects between what sales expects, what marketing is promoting, and what supply chain is prepared to deliver.