Home » Educational Blogs » What is Demand Planning?
In this video, we discuss the definition of demand planning and the seven key steps involved in the demand planning process. We also discuss the importance of demand planning for businesses of all sizes.

Demand planning is the process of predicting future demand for products or services. This forecast is then used to make decisions about inventory levels, production schedules, and marketing campaigns.

Demand planning is important for businesses of all sizes because it helps them to ensure that they have the right amount of products or services available to meet customer demand. This can help businesses to improve their customer service levels and avoid stockouts.

The seven key steps involved in the demand planning process are:
1. Collecting critical information and data
2. Measuring the accuracy of predictions against actuals
3. Creating a baseline forecast
4. Applying lessons learned
5. Incorporating analyst and planner insight
6. Editing, reviewing, and checking the forecast
7. Approving and submitting the final demand forecast


What is the definition of Demand Planning? And what does Demand Planning consist of? Demand Planning is a prediction of what a company intends to sell in the future. It consists of determining what demand there will be for it’s products and then building plans to support that estimated demand.

As an example, if this is where you stand today, looking back, you know the products and volumes that were sold, but you need to know what you will be able to sell tomorrow and further into the future. But Demand Planning breaks this information down into much more detail. You need to predict what products that you plan to sell and how many of them you need to predict, where you plan to sell all these products, and how you will process them through your distribution network And when in the future they will be sold. Demand Planning is a core supply chain activity in all types of industries and businesses.

From retail to services and whether business to business or business to consumer, a Demand Plan could be for end consumer products or products that go into end consumer products or service time. Demand Planning involves the following seven key steps on a regular basis: collecting critical information and data, measuring the accuracy of predictions against actuals or post-game analysis, creating a baseline forecast and sometimes a promotional uplift too applying lessons learned, analyst and planet insight into the forecast, editing, reviewing and checking the forecast, approving and submitting the final demand forecast, archiving and preparing to begin the forecast cycle again.

In summary, consider the input to Demand Planning as the question what is going to happen and the output of Demand Planning being we think this is likely to happen.