- Demand management is a key part of the sales and operations planning (S&OP) process and the integrated business planning functions at an organization because it results in a demand plan that is used in and modified by these integration processes.
- The S&OP is a disciplined monthly review process by management to evaluate and ensure conformance of sales and operations with the business plan.
- The S&OP process involves a series of meetings between supply-and demand-side professionals and executives to synchronize plans and arrive at a single set of demand numbers.
Demand Management is defined is defined as:
- The function of recognizing all demands for goods and services to support the marketplace. It involves prioritizing demand when supply is lacking and can facilitate the planning and use of resources for profitable business results.
- In marketing, the process of planning, executing, controlling, and monitoring the design, pricing, promotion, and distribution of products and services to bring about transactions that meet organizations and individual needs.
Demand management is the art of synchronizing supply and demand plans. Demand management is necessary at each of the levels at which supply and demand plans are generated:
- Long-term strategic needs, including long-term forecasting, product development, or capacity development.
- Medium-term aggregate demand forecasting and master planning.
- Short-term demand forecasting and item-level master scheduling.