Demand Planning vs Forecasting: Understanding the Key Differences
Demand Planning vs Forecasting: Understanding the Key Differences In the dynamic world of supply chain management, two critical concepts often come into play: demand planning and forecasting. While they may appear similar, these processes have distinct roles in ensuring smooth operations and effective inventory management. This article delves into the differences between demand planning and forecasting, exploring their purposes, benefits, and how they work together to optimize supply chain efficiency. Understanding Demand Planning and Its Role Demand planning is a strategic process that goes beyond simply predicting future demand. It involves a comprehensive approach to aligning a company's inventory, production capacity, and supply chain strategies with anticipated market needs. The goal is to ensure that the right products are available at the right time, in the right quantities, to meet customer demands. Key Components of Demand Planning Data Analysis: Demand planning relies o...