FORECASTING & DEMAND PLANNING
Enabling Sell-Side Collaboration
Companies no longer have the luxury of being able to expend significant resources to have a
multi-phased demand management process and technology roll-out. They need to be laser-
focused on the right mix of processes and tools suitable to their unique environment. The two
key determinants are: type of supply chain and the planning window.
—Nari Viswanathan, vice president and principal analyst, Supply Chain Management, Aberdeen Group
raditional approaches of solely focusing on being
demand-driven from a demand planning (statisti-
cal forecasting) perspective are not adequate.
Companies must balance demand planning with
best-of-breed demand management systems T
• Best-in-Class companies are 1.6 times more likely to adopt
• Best-in-Class are 30 percent less likely to be using spread-
sheets for solving demand management problems
short-term responsive strategies. Aberdeen’s report, Demand Man-
agement: Enabling Sell Side Collaboration and Increased Revenue,
highlights specific approaches that companies with different types The current software mix is skewed towards demand planning
of supply chain—build-to-stock, build-to-order and engineer-to- types of solutions. Only 14 percent of companies indicated that
order—need to adopt with respect to demand management.
they don’t plan to use statistical demand forecasting versus 48
Industry Average and Laggard companies are still focused percent that don’t plan to use sell-side demand visibility soft-on an internal collaborative approach towards demand man- ware. However, these solutions are inadequate for solving the
agement. They still focus on demand forecast accuracy as the gamut of issues that companies face. The solution mix should be
key metric for managing the process. This approach is suitable more balanced across some of the other categories, such as pro-for build-to-stock kinds of environments but not for build-to- motion planning, sell-side collaboration, demand visibility and
order. Best-in-Class companies are focusing more on customer demand sensing. That ensures that demand plans can be
forecast collaboration and creating a more responsive distribu- adjusted based on external market factors both in the long and
tion strategy, whereas Industry Average companies are much short terms. Promotion planning results in the incorporation of
more focused on demand forecast accuracy. Best-in-Class have promotion events that can influence demand. Demand sensing
realized the need to increase collaboration in the demand net- solutions can obtain real-time customer purchasing trends and
work to improve sales revenue (sell-through and sell-in).
influence demand. Sell-side collaborative solutions can help
Two areas where we see differentiation for Best-in-Class com- companies to factor in near-term trends essential for companies
panies with respect to technology are:
to understand before stocking up on inventory.