How CIOs Can Get Manufacturing Demand Planning Right

The firm recommends in a new industry blueprint that businesses adopt built-for-purpose demand planning systems and embrace a holistic planning approach for optimal results.

The manufacturing industry has been grappling with demand volatility even before the COVID-19 pandemic, with businesses encountering challenges when attempting to shift from an administrative approach to strategic demand planning. Inadequate demand planning can lead to missed sales opportunities, overstocked inventory, strained supplier relationships, and increased costs for expediting goods. To help the manufacturing industry achieve sustainable growth and operational efficiency, global IT research and advisory firm Info-Tech Research Group has published its latest research, How CIOs Can Get Manufacturing Demand Planning Right.

The firm’s research highlights the necessity for businesses to adopt a comprehensive approach to their demand planning systems to attain an ideal, streamlined outcome. However, several challenges can hinder this maturity progression. One such hurdle is the unpredictability of consumer trends and the shift to e-commerce. Further, selecting appropriate simulation models for accurate demand forecasting presents a significant challenge, and managing a complex data landscape, which is key to unlocking valuable insights into customer demand, also poses considerable difficulty.

“Traditional ERP systems do not provide planners with the flexibility they need to simulate options, test forecasting models, and adjudicate the accuracy of their demand planning logic,” says Shreyas Shukla, principal research director at Info-Tech Research Group. “Instead, the answer to optimization challenges is a two-pronged approach: Use a built-for-purpose demand planning system, and take a holistic view of the planning philosophy and performance management framework.”

For optimized demand planning, Info-Tech recommends organizations advance the maturity of the planning ecosystem by addressing gaps across performance management, analytics, and data and systems dimensions. The firm also advises in the new industry resource that the following approach be considered to optimize a plan that meets rapidly evolving customer demand:

  1. Data Collection: Gather data, analyze variables, and develop forecasting models to predict future events and trends.
  2. Demand Forecasting: Predict future demand to optimize operations, meet customer needs, minimize costs, and enhance operational efficiency.
  3. Demand Planning: Optimize inventory, schedule production, allocate resources, and coordinate functions to meet forecasted demand efficiently.
  4. Order Allocation: Maximize efficiency by strategically distributing inventory across various regions, channels, and customers to enhance satisfaction and minimize stockouts.
  5. Order Fulfillment: Streamline order fulfillment to expedite processing, ensure precise deliveries, minimize errors, and boost customer satisfaction.

A typical supply chain plan involves complex relationships between components of the business planning layers. For successful execution on the shop floor, different stakeholders need to constantly communicate with each other. This relationship needs to run like a well-oiled machine.

Download the complete How CIOs Can Get Manufacturing Demand Planning Right blueprint to enhance the efficiency of demand planning and effectively address customers’ ever-changing needs.

For more information about Info-Tech Research Group or to access the latest research, visit and connect via LinkedIn and Twitter.

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