Demand Planning is the process that forecasts and manages consumer demand. This process works across many functional areas in a company in order to minimize excess and obsolete inventory, while mitigating out-of-stocks and supply chain disruptions. It involves predicting consumer demand based on factors such as past and current sales data, orders and shipments, the impacts of advertising, marketing and sales, the actions of distributors and retailers, and other events or demand signals e.g. severe weather or even a global pandemic. Demand planning maintains rolling forecasts over a defined period of time for product categories down to individual SKUs (stock keeping units). Demand forecasts determine the amount of inventory, ranging from raw materials to components to finished goods, that a company needs to order and/or manufacture, to ultimately align its supply with forecasted demand.  

It is critically important for a company to manage its production and inventory levels so they meet the fluctuations in demand. If a company isn’t able to do so, it can have surplus inventory when demand may be low and not enough inventory when demand is high. An inability to accurately and capably balance demand with inventory can be the death knell for a company. Inaccurate forecasting resulting in inadequate inventory levels has caused many companies to go out of business. In short, carrying excess or obsolete inventory negatively impacts margins, while not having enough inventory in stock leads to frustrated customers and lost revenue opportunities.

Similar Job Titles

Sometimes employers post jobs with Demand Planning Manager skills using different job titles such as:

  • Supply Chain Planning Manager
  • Manager of Demand Planning
  • Demand Forecasting Manager
  • Forecasting Manager
  • Statistical Forecasting Manager
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Demand Planning Manager Position Overview

A Demand Planning Manager oversees the daily operations of the demand planning department team members as they analyze customer and vendor demand to develop and fine tune forecasts. The manager’s responsibilities include reviewing purchase history, sales history, the marketing strategies the company has used to promote products and stimulate growth and, ultimately, evaluating their effectiveness. 

Demand planning managers develop effective forecast models based on industry trends and demand patterns and subsequently implement solutions to improve the accuracy of demand forecasting. A successful demand planning manager is highly analytical with  in-depth knowledge of advanced mathematical and forecasting policies. In addition, strong communication and stakeholder engagement are critical to success, which includes the ability to effectively partner and collaborate with those leading and working on the commercial side of the business i.e. sales, marketing, advertising, merchandising and related. 

A person in this position may oversee a unit within the department or oversee the entire department. The manager trains new demand forecasters and analysts. Additionally, the manager meets with other functional area managers and executives spanning Sales, Marketing & Advertising, Finance and Supply Chain, to review strategies related to both short- and long-term planning. The demand planning function typically reports into supply chain, although it’s becoming more common to see it reporting into the commercial side of the business. 

As it relates to a company’s Sales & Operations Planning (S&OP) or Integrated Business Planning (IBP), demand planning plays a key role in these more advanced enterprise-wide planning processes, contributing product forecasts and demand consensus reviews with counterparts in Supply Chain / Operations, Finance, Sales & Marketing, and the Executive Leadership team.

The increased demand for demand planners has given rise to increased compensation packages and rapid advancement opportunities. Demand planning managers can move up into broader planning roles such as overseeing supply chain planning (both supply & demand planning), S&OP or IBP implementation or ownership, as well as leadership roles within supply chain, operations, and commercial aspects of a business e.g. sales, marketing, merchandising, brand management, and the like. 

Primary responsibilities of a Demand Planning Manager

Some of the primary responsibilities include:

  • Developing effective forecast models based on industry trends and demand patterns
  • Proposing and implementing solutions to improve demand forecast accuracy
  • Successfully communicating forecast and inventory estimations to management
  • Monitoring and reporting on important changes in sales forecasts, budgets, and business strategies
  • Supporting management with risk assessments and mitigation activities
  • Conducting monthly forecast maintenance
  • Addressing demand-related issues in a timely and effective manner
  • Assisting in developing annual budgets and streamlining costs
  • Scheduling regular forecast review meetings with management
  • Maintaining demand planning processes to improve forecast accuracy
  • Updating forecasts for new products, seasonal products, discounts, and promotions
  • Working with team members to plan, coordinate, and execute demand planning activities
  • Coordinating with inventory team to monitor and maintain optimal inventory levels
  • Assisting in employee recruitment, performance evaluation, promotion, and retention activities
  • Maintaining training materials and organizing trainings to team members

Required and Desired Skills

Soft Skills:

  • Planning
  • Communication
  • Teamwork and Collaboration
  • Problem Solving
  • Stakeholder Engagement
  • Influencing / Persuasion
  • Delivering Presentations

Hard Skills:

  • Knowledge of Supply Chain Processes 
  • Demand Planning
  • Statistical Forecasting
  • Supply Chain Management
  • Logistics
  • Enterprise Resource Planning (ERP)
  • Kanban
  • Microsoft Excel
  • Data Analysis
  • Inventory Management
  • Purchasing
  • Business Planning
  • Advanced Planning Systems & Tools
  • Report Development

Skills that can distinguish a subset of the role and enhance qualifications include:

  • Inventory Optimization
  • Statistical Forecasting
  • Global Supply Management
  • Supply Chain Coordination
  • Supplier Management
  • Financial Analysis

Required/Desired Education and Qualifications

  • Bachelor’s Degree and/or Master’s Degree in Business, Supply Chain, or other related fields.
  • A minimum of 3 years of experience in a demand planning/forecasting role
  • A solid understanding of inventory management practices and procedures
  • Strong mathematical and statistical knowledge
  • The capability to multitask in a fast-paced environment
  • Excellent written and verbal communication skills

A Day in the Life of a Demand Planning Manager

A typical day for Demand Planning Managers is fast-paced with many meetings collaborating and training:

  • Meeting with team members to get status on projections and forecasts
  • Meeting with managers in other functions for updates and vital communications such as in regards to sales and marketing
  • Collaborating with others involved in production and demand on forecasting models
  • Solving issues/problems to maintain accuracy in forecasts
  • Using software tools for resource planning and inventory management

Demand planning managers should be keeping up with best practices in the industry. They also need to be on top of trending news and innovations in the world of demand planning. Applying your demand planning skills should be done in a way that is custom tailored to your company’s industry. So be sure that you’re developing your knowledge base accordingly.

Technology

Accurate forecasting is achieved through the use of technology. Some of the top 10 demand planning software tools include:

  • SAP Integrated Business Planning
  • NETSTOCK
  • SAP Advanced Planning and Optimization
  • Oracle Demantra
  • Demand Planning
  • Logility Solutions
  • StockIQ
  • Toolsgroup

Typical Working Conditions for a Demand Planning Manager

Most of the work a demand planning manager does is in an office environment.

Demand Planning Manager Salary Range and Benefits

Salaries for Demand Planning Managers in the U.S. can vary quite widely depending on the size and complexity of projects, plus education, certifications, the number of years you have spent in the profession, your experience, and additional skills.

According to www.ziprecruiter.com, the average annual pay for a Demand Planning Manager in the U.S. is $91,000 a year. Annual salaries range from $116,000 to $61,000, with the majority between $79,500 (25th percentile) to $102,500 (75th percentile). Top earners (90th percentile) are making $111,500 annually across the United States. 

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