This document discusses demand planning and the influences on the supply chain. It begins by introducing demand planning and how understanding consumer behavior is key. It then outlines several factors that influence demand, including the marketing mix of product, place, price, and promotion. It also discusses demand patterns like trends, seasonality, and cycles. The document emphasizes that demand planning requires analyzing data from various sources to understand the consumer and forecast future demand. It concludes that demand planning is both an art and a science that requires collaboration between stakeholders.

1. PREDICTING THE FUTURE
GRAEME SHEPHERD
Demand planning and
influences on the
supply chain

2. INTRODUCTION
What drives us as individuals to actively consume a
product or service?
Is this motivation: desire, need, want or a basic
necessity?
Having a product or service where and when the
end customer wants to consume it is key – this
takes time, money, resources and lots of inputs
Often dictates the success of a business or
innovation

3. CONTENTS
 Define demand and where it goes
 The consumer and their behaviour
 Influences on demand
 Product
 Place
 Patterns
 Inputs into the Demand
 Agility and Efficiency
 New Product launches
 Collaborative forecasting
Objective: To give a
holistic overview of what a
demand planner does, how
the consumer behaviour is
analysed and how this
process is managed
throughout the supply
chain.

4. ABOUT ME
Geography and the Environment MA Hons
Majestic Wine Warehouse Graduate
programme
Purchasing and Supply Chain Management MSc
Revlon International Demand Planner
Revlon UK Senior Demand Planner
Unilever Category Demand Planner (FMCG)
MCIPS and APICS (Pending)

5. DEFINE DEMAND AND DEMAND
PLANNING
Planning demand is both an art and a science where
you are forecasting a likely outcome based on
assumptions
Understanding the consumer and their
behaviour/influences are pivotal in the robustness of
the forecast
Essentially forecast what end customers will consume

6. WHERE DOES THE
DEMAND GO?
Simplistic Supply Chain Diagram
(amended)
(Clermiston Consulting, 2003)
 Consumer at one end and
suppliers at the other
 Significant production takes place
end to end
 Suppliers of Suppliers impacts
 Place of manufacture important
 Cash flows up and materials flow
down
 Significant time lags or periods in
responsiveness
 Inventory builds at certain places
to aid demand
 Safety stocks to be a buffer
 Capacity constraints
Consumer

7. DEMAND BEGINS WITH THE
CONSUMER AND THEIR BEHAVIOUR
Thoughts
FeelingsActions
Situatio
n
The closer to the consumer a
business is the greater the insights
Get into the head of the consumer
Behaviour alters in the situation
and environment
 Social, economic, demographic

8. CONSUMER BEHAVIOUR
“In the factory, we make cosmetics; in the store
we sell hope.”
Charles Revson founder of Revlon

9. ALL THE P’S – INFLUENCES OF
MARKETING
 PRODUCT – products are unique and often dictate the
other Ps
 PRICE – what are consumers willing to pay? Is it too
cheap?
 PROMOTIONS – what type and is it correct?
 PLACE – where is this available
 Pushes and pulls in differing degrees of ferocity in

10. PRODUCT LIFECYCLE
0
0.5
1
1.5
2
2.5
3
3.5
4
4.5
Introduction Growth Maturity Decline
 Products have different lifetimes – dictated by the consumer, decision
makers, and competition
 Demand patterns are different for the stages in the cycle
 Lifecycle can be natural and evolve or be ‘manufactured’ – planned
obsolescence reducing purchasing cycle (GM, 1924)
 Can also be applied to a company or business – Apple

11. PLACE
 Channel of proposition – bricks and/or clicks?
 Retailer – behaviour, payment terms
 Forecast usually planned at customer/retailer level
 Number of stores – distribution and productivity
 Availability – replenishment and service levels
 Exclusivity – drives a perception for the consumer
 Merchandised – own space or competitively led?
 Where is the promotions run from – e.g. secondary space
 Expectations of consumer

12. DEMAND – ALL ABOUT PATTERNS
Depending on the Ps of Product, Place, Promotion and
Price but drives volatility and noise in the demand
pattern
Undelaying patterns is a BASE FORECAST and RATE OF
SALE:
 It gives a ‘level’ to the forecast
 What customers will purchase with no promotions and
topline price
 It is the foundation block in a forecast where
Promotions and price changes are built on top

13. ALL ABOUT PATTERNS
TREND
Often depends on product lifecycle and
also health of the Brand
Often can direct total market
Sets the magnitude of the forecast
SEASONAL
0
2
4
6
8
10
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Seasonal
0
2
4
6
8
10
12
14
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Growth Decline Static
Finding the causals of demand is
important
Drives stock holding and capacity but also
targets and £$£
A clear driver that happens every year

14. ALL ABOUT PATTERNS (2)
RANDOM
Often driven by sales opportunities
when they arise
CYCLICAL
Often due to wider economic factors
and over longer periods
0
2
4
6
8
10
12
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Cyclical
Cyclical
0
2
4
6
8
10
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Random

15. PLANNING FUTURE DEMAND
Dictated by pattern of demand and the influences on the P’s
Strip sales history back of all influences to = base forecast
Flow base forecast into future with any underlying trends
Build on assumptions of impacts and influences on the Ps
Goal is to replace numbers and forecasts with knowledge and
understanding = stakeholder action and alignment

16. THE INPUTS INTO THE DEMAND
SIGNALExternal and internal influences create a lens to see and create
demand
Expert Opinion
Historical data
Sales estimate
Market research
Historical like
profiling
Discon /
Cannibal
Lifecycle
Analysis

17. SOURCES OF ‘OFFICIAL’
INTELLIGENCEDATA = INFORMATION which drives changes and actions
Behaviour data and information sources vary depending on
sector:
 Nielsen – EPOS and Market Share (limited coverage)
 Kantar – product impact on market
 IRI – Market reports
 IGD – Research and data company
 WGSN –fashion and trend
 Mintel - lifestyles
 Chainlink – Specific sources for sector
 Brand View – competitor listings and promotions

18. AGILE AND/OR
EFFICIENCY
By understanding the
product demand and any
future impacts of consumer
behaviour you can build
your supply chain
What do consumers expect?
Sector dependant
Can be exclusive or hybird
Alters during a product’s
lifecycleDHL (2013,
p.11)

19. NEW PRODUCT LAUNCHES
Some sectors rely heavily on new products and innovations
Processes designed to take this from inception to execution in
market
Can be a game changer – need to funnel to focus
Series of gates for projects to pass to funnel the creativeness
Every action has a reaction – cannibalisation, discon,
distribution losses
If some companies stop innovating or do innovation badly they
often do not last
Product
Developme
nt Institute
http:
//www.pro
d-
dev.com/st
age-
gate.php
(Product Development Institute,

20. DEMAND PLANNING CYCLE
Collaborative
forecasting
Gather data
and info
Create
forecast
Resolve
volume
relationships
Apply
judgements
Document
(APICS, 2015)

21. COLLABORATIVE FORECASTS
Process of alignment and inputs where all stakeholders have a
vested interest in projections
Best practice methodologies applied to drum beat of a business
cycle: S&OP, IBP, 6 Sigma
Highlight risks, opportunities and gaps in plans
Demand is a rolling 24 month horizon
Single set of numbers for the volume that drives the financial
forecast
A budget is a snap shot of the demand signal at a designated
time
Volume GSV NSV

22. CONCLUSION
Demand Planning is both an art and a science
The consumer drives the demand in a sector and this
is created by their behaviour
Interrelationship of all the Ps = the pattern of demand
The demand pattern commands the type of supply
chain of a product
Assumptions driven by insight and intelligence from
various sources
Collaboration and one number mentality allowing
stakeholder inputs crucial

23. Q&A

24. REFERENCES
APICS (2015) Introduction to Forecasting and Demand Planning [Online]
http://www.apics.org/docs/default-source/events-apics-2014-dubai/introduction-to-
forecasting-and-demand-planning.pdf?sfvrsn=2 [Accessed 2nd March 2015].
Clermiston Consulting. (2003) The Supply Chain. [Online] Available from:
http://www.clermiston.com.au/Supply%20Chain.htm [Accessed 2nd March 2015].
DHL (2013). Fashion Unleashed: The Agile Fashion Supply Chain [Online] Available from:
http://www.dhl.co.uk/en/logistics/industry_sector_solutions/fashion_logistics/supply_ch
ain_analysis_and_design.html [Accessed 2nd March 2015].
Product Development Institute (2015) Stagegate – Your Roadmap for New Product
Development [Online]. Available from: http://www.prod-dev.com/stage-gate.php
[Accessed 2nd March 2015].
Further Reading on Consumer:
Blythe, J. (2013) Consumer Behaviour. 2nd Ed. Sage Publishing: London.