Many planning processes depend on a good demand plan. Yet a surprising number of big companies still rely on a home-grown Excel solution for demand planning, even though more advanced and robust solutions are available on the market. In this blog post we provide an overview of the alternatives and help you evaluate if they are a good fit for your business.
Excel is a powerful software and an excellent business analytics and reporting tool. However, it has major limitations when it is used as a demand planning tool. Let’s start with the set-up: A demand planning tool needs to be fed by different information sources, which can lead to multiple sources of truth. Do you recognize that the numbers a demand planner works with are different from what the demand manager sees, due to consolidation issues and the lack of version control? Excel is prone to human data entry errors and it is still problematic to work with multiple people in one Excel worksheet. Often the tool has initially been set-up by an advanced Excel user, with all good intentions to make it fit-for-purpose and fool proof. But often other users add more ‘functionality’ later on, while in the meantime the initial builder has left the company. An Excel tool can easily become overly complex, leading to decreasing transparency and reliability. It can also get slow when it reaches its calculation limits. This frustrates the user and impacts the whole S&OP (sales and operations planning) cycle as it reduces the efficiency of the demand planning process. And even worse, you might take wrong decisions based on incorrect information.
All of the mentioned limitations could be solved by an advanced planning system (APS) such as SAP IBP, Kinaxis, o9, and OMP (just to name a few). There are numerous options when choosing advanced demand planning software, but companies should be selective and it should be based on your unique needs. Demand planning is only one part of S&OP. And S&OP is again only a part of the complete scope of an APS. Implementations of an APS are generally mega-projects with huge budgets and typically require long time-to-operate lead times. To be ready for a full-blown APS implementation, an organization often needs to grow its planning maturity in processes, data, and people capabilities first. And then it can still take years to select and implement such a system.
The good news is that the gap between an Excel-based demand planning tool and a full-fledged APS solution can be bridged. An affordable and proven cloud-based demand management tool can be configured fit-for-purpose within 10 weeks, often as part of a forecast analytics service. Typically a reliable baseline forecast, generated with the latest statistical and machine learning techniques, is input to such a demand planning tool. In the tool stakeholders can then review and enrich the forecast with market intelligence, using alerts to focus on the right areas. This solution allows you to always access the latest consolidated forecast view, making sure you have a demand plan you can trust.
As part of our forecasting service we create a fit-for-purpose solution in Jedox based on your unique business needs.