Introduction to Demand Management

This chapter covers the following topics:

Introduction
What is Demand Management?
Why Manage Demand?
Typical Tasks in Demand Management

Introduction

Oracle Demantra Demand Management is a configurable Web-based product to help your organization perform demand planning and forecasting. Your system has been configured to support you and others in your company. Oracle Demantra Demand Management provides access to your historical sales data, returns, and other reference data organized into multiple hierarchies that reflect the needs of your organization. An underlying spreadsheet provides a set of calculated (and input) values that you can use at any hierarchy level.

The process of demand planning generally consists of studying historical sales data and trying to predict future demand as closely as possible. The goal is to achieve an appropriate balance between meeting customer demands as quickly as possible and making or buying only as much of each product as required. Oracle Demantra Demand Management and Demand Planner give you insight into both sides of this trade-off.

A demand plan is based on a forecast, which in turn is a prediction of tendencies in the supply chain over a period of time, influenced by seasonal and other predictable factors. The result of a forecast is a projected curve that has been smoothed to show tendencies and deemphasize the exceptional variations.

In general, the demand plan and forecast are used in downstream operations such as production planning. Depending on how your system has been configured, it either exports such data automatically or contains reports that you use for that purpose.

What is Demand Management?

Demand Management is used to enable organizations to produce unconstrained forecasts for future demand and generate tactical, operational, and strategic business plans. Demand Management captures and processes information from multiple sources and consolidates demand so that it can be summarized by item, product line, region, time, and organization.

There are three key areas of focus in improving Demand Management processes. They are: achieving consensus, improving accuracy, and reducing process cycle time. Getting an entire organization to one expression of “the forecast” is the most important goal of a good Demand Management process. This requires the ability to gather and consolidate all the sources of demand information. It also requires providing secure, portal based access to receive, analyze, and submit forecast data, and the ability to express the data in the right format. For example, view forecast by region in dollars, forecast in units by shipping facility, and so on.

Why Manage Demand?

While demand is inherently variable and some inaccuracy is inherent, improving accuracy is also critical. Improving accuracy requires improvements in several areas. For example, organizations use statistics to better estimate patterns, they consolidate quantitative and qualitative judgment, and use performance management to drive continuous improvement over time. Perhaps the most important area is reducing the cycle time of the demand management process. The longer the process takes, the more inaccurate it will be, the further in advance of actual events the prediction will be, and the process will also become less frequent. Cutting time out requires powerful analytic tools to quickly assess and understand demand and automating processes to allow for management by exception.

Typical Tasks in Demand Management

At a very high level, you might work with Oracle Demantra Demand Management as follows:

Log on.
Open a worksheet.
View the forecast series and other data and work with it in any of the following ways, as needed:
- Edit data manually
- Perform a simulation.
- Perform data approval.
- Export data for downstream use.
Log off.