What is a Demand Planner?

If your business has too much inventory on its hands or often winds up with items out of stock, you may need a demand planner. A demand planner determines your inventory needs ahead of time to ensure that you don’t end up with too little or too much stock. It may seem like a simple job, but it can be complicated and nuanced. Many companies don’t even employ demand planning, and some do not employ it correctly. A demand planner must be an expert in their craft to get the job done correctly. So what exactly is a demand planner, and where do they fit into an organization? 

Defining Demand Planners

A demand planner’s goal is to anticipate the demand for a company’s given product and ensure that the company’s supply chain can meet that demand efficiently, without excess expenses. Without them, companies are challenged in not being able to meet customers’ expectations on when, where, and how to buy a product. 

These planners use statistical forecasting to monitor trends and customer behavior to create demand forecasts for a company’s products, product lines, or services. While doing so, they also coordinate with representatives across the supply chain. Sometimes this may include original equipment manufacturers (OEMs), suppliers, or distribution centers. 

Demand planners are different from supply planners in that demand planners forecast based on trends, historical demand and customer interests while supply planners fulfill the demand. You can read more about the difference between supply planning and demand planning in our blog article: “Demand Planning vs Supply Planning: What’s the Difference?”

Demand Planners’ Duties

What does a day on the job look like for a demand planner? They have a variety of duties within their organization. These duties may include: 

• Developing forecast models based on trends in the industry and demand patterns. 
• Supporting management using risk assessments and mitigation activities
• Proposing and implementing solutions that improve the accuracy of demand forecasts
• Successfully communicating demand forecasts and inventory estimations to the company’s management
• Monitoring and reporting on critical changes in sales forecasts, budgets, and business strategies
• Conducting regular forecast maintenance (monthly, quarterly, etc.)
• Addressing demand-related issues in a timely and effective manner 

Of course, every company is different, and these duties may be split between multiple people, or a demand planner may have to do more. It generally depends on the company’s size, how much inventory they are putting out, and how quickly. 

How Does Successful Demand Planning Look?

There are seven key steps that individuals in this position take in order to succeed: 

• Create a Team: Developing a team involves ensuring members have clear roles and responsibilities, and are committed to the goals
• Define Relevant Internal Data: All of the employees need to agree on this data
• Enhance the Forecast with External Data: External data is just as important as internal data – ensuring it’s accurate and properly shared. 
• Develop Statistical Demand Forecast: Determine the type of forecasting model and start building it
• Challenge the Demand Forecast: Review and refine the demand forecast with key stakeholders
• Weigh Forecasts Against Inventory: Determine how much inventory is needed
• Measure Results: Identify KPIs to determine the effectiveness of your demand planning

Demand Planners Within an Organization

Every company’s organizational structure is different, but demand planners usually fall within the company’s operational department. However, they don’t land squarely within the operations field. In fact, they usually serve as a bridge between sales and operations planning. 

Demand planners work with sales and marketing teams in creating their forecasts to ensure they are accurate. Then, they work with the operations team to build out their demand plans that include ideal inventory levels, shipping timelines, and other steps that the company must take to meet demand. While these individuals work with all departments across the board, they work with operations and sales the closest. 

Boost Demand Planning in Your Organization

Your demand planner can’t do everything on their own. Without the right technology, the job cannot be done right. Blue Ridge Global has created software that ensures accurate and intelligent forecasting, so your demand planners can nail your forecasting every time. Try out a demo of our software and take these tools for a test drive.