Group 4 Demand Mgmt ESBlanco

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Demand Management,

Order Management,and

Customer Service

Group 4 Aura Marie Baetiong

Emelina Blanco

Montecarlo Manalo

Logistics Management Prof. Raymundo D. Miguel

26 September 2010



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Learning Objectives Appreciate the growing need for effective

demand management.

Know the types of forecasts that may be needed, and understand how collaboration among trading partners will help the overall

forecasting and demand management process.



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Learning Objectives Identify the key steps in the order fulfillment

process, and understand how effective order

management can create value for a firm andits customers.

Realize the meaning of customer service, and

understand its importance to logistics andsupply chain management.



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Demand Management Defined as focused efforts to estimate and

manage customers demand, with the

intention of using this information to shape operating decisions.

Creation across the supply chain and itsmarkets of a coordinated flow of demand



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Demand Management It is this disconnect between manufacturing

and the demand at the point of consumption

that attracts attention to demandmanagement.

Any attention paid to demand management

will likely result in benefits flowing throughthe supply chain.



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(Phantom Demand)Supply-Demand

Misalignment



Independent demand Amount of product demanded by end-use customer of

the supply chain

Derived demand A demand that is derived from what other companies in

the supply chain do to meet their demand from immediate customer

Dependent demand Demand for the component parts that go into a product

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Demand Management



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Demand Management

Derived vs. Independent Demand

Demand error in a traditional supply chain



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Demand Management

Derived vs. Independent Demand

Demand error in a Demand Planning Supply Chain



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Demand Management Objectives Demand Management in Supply Chain Management



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Demand Forecasting Sales and Operations Planning



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Traditional Forecasting:

Demand Forecasting

A major component of demand management is forecasting the amount of product that will be purchased by consumers or end users.

Sales forecasting is projecting into the future

of expected demand, given a stated set of environmental conditions.



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S ales Forecasting

Techniques

a. Qualitative

b. Time S eries Analysis

c. Causal

d. S imulation Models



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S ales Forecasting Models

a. Qualitative

Grass roots Market research

Panel consensus

Historical analogy Delphi method



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a. Time S eries Analysis

S imple moving average Weighted moving average

Exponential smoothing

Regression analysis

Box Jenkins technique

S hiskin time series

Trend projections



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a. Causal

Regression analysis

Econometric models

Input/Output models

Leading indicators



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S ales Forecasting Sys tem

Example of a S ale s Foreca s ting Proce ss



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S ale s Foreca s ting Que s tion s Cu s tomer ba s e narrow or broad?

Data characteri s tic s (s hipment s , s ale s and demand,

age, detail, external data, quality)? Number of foreca s t s ?

Number of new product s ?

Regional difference s ?

S ea s onality?

S ophi s tication of per s onnel and s ys tem s ?

S ale s foreca s ting budget?

Accuracy needed?



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Demand Management:

Related Iss ue s

Lack of communication between department s re s ult s in little or no coordinated re spons e t o dema nd i nf ormation.

Too much e mphasis is of t e n pl aced on f ore casts of de mand wit h l itt le att e ntion paid

to coll aborative eff orts and strat eg ic andope rational pl ans t hat need to be devel opedf rom t he f ore casts .



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De mand M anage me nt :

Rel at ed Iss ue s De mand inf ormation is of t e n u s ed more f or tactical and ope rations pu rpos e s t han f or

strat e gic pu rpos e s . Primary e mphasis s hould be on u sing de mandinf ormation to cre at e l ikely sce narios of t he fu t u re as t hey rel at e to produ ct s u pply

al t e rnative s . Re s ul ting bu sine ss s u cce ss e s will be a ou tcome of t he be tt e r match of de mand to produ ct avail abil it y.



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Group 4 Demand Mgmt ESBlanco

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