Demand Management as a Planning Methodology

Demand management is a planning methodology used for planning and executing demand on different various services and products. Demand Management is used to determine requirement quantities and delivery dates for finished products. Demand Management provides a demanding program which is used by MRP to generate production plans. Depending on the planning strategy chosen in the material master, the demand program can use forecasts of demand, actual demand, or combinations of both. Actual demand is created in sales order management (customer orders) and materials management (warehouse replenishment). Forecasts of demand are represented by ‘planned independent requirements’which are copied from the Sales and Operations Plan.

Demand Management Process

SOP plans are transferred to Demand Management as ‘Independent Requirements’for end products
The actual sales orders are for information purpose only and are not considered in planning.
In case the sales orders significantly vary from the forecasted demand; Planners revise the demand before running MRP to generate manufacturing orders and purchase requisitions

Who is responsible for Demand Management

Responsible for managing the demand by comparing the actual demand with the forecast and manipulate the plan based on the actual demand before executing MRP