Shipping containers moved into a cargo terminal after the company evaluated their demand planning vs. supply planning needs

Demand Planning vs Supply Planning: What’s the Difference?

Demand planning and supply planning go hand-in-hand. Companies need to be able to plan for the expected customer demand for their goods, products, and inventory. They also need to plan how to meet this demand by allocating the appropriate amount of resources.

That’s why many companies spend a lot of time reviewing demand planning vs. supply planning to ensure that both supply chain logistics functions complement each other. Otherwise, if one or both areas are out of sync, companies can quickly incur additional costs, miss deadlines, and create other headaches.

Consider the key aspects of both demand planning and supply planning to ensure that your company is on the right track.

Demand Planning: The Importance of Reliable Forecasting

Demand planning relies on the quality of forecasts and predictions. Companies need to be able to understand when customers will request specific goods that your company manufactures, produces, stores, or provides. Without accurate forecasts, your company will constantly be in scramble mode, trying to satisfy each customer request.

As we learned during the COVID-19 pandemic, forecasts can sometimes be thrown out the window! Everything changed during that initial period of disruption when there were seismic shifts in demand from customers and endless uncertainties about product availability.

Now, though, things have settled down. Sure, the industry is still subject to the global supply chain crisis, but companies can make more informed forecasts using the latest data available to them. This is why demand planning requires the following:

  • Centralized data to view all relevant data in one clear, concise view.
  • Access to real-time data to generate accurate and reliable reports.
  • Enhanced communication with partners to gather, synthesize, and review data.
  • Visibility into shipments and customer orders across the entire supply chain.

Then, effective demand planning can feed directly into successful supply planning.

Supply Planning: The Importance of Trusting the Data

Supply chain professionals that are responsible for supply planning have to place a considerable amount of trust in forecasts. A poor forecast can create damage in terms of wasted resources, the inability to satisfy actual demand vs. forecasted demand, and rapidly rising costs trying to keep the customer happy.

That’s why data integrity is critical to support the needs of the supply planning function. With access to good data, supply planners can make strategic decisions such as:

  • How much raw materials to order to support the production/manufacturing of certain goods.
  • How much time to allow for the production/manufacturing of the expected number of goods that the customer will request.
  • When to increase headcount in the warehouse/another facility to support expected spikes in customer requests.
  • When to schedule shipments for completed customer orders.
  • How much inventory to keep on hand in anticipation of future customer demand.

Reliable data is critical to ensure that your company remains proactive when planning supply. You don’t want to constantly be in reaction mode, trying to adjust on the fly or having to increase production for a specific item suddenly. By then, it’s too late.

Fortunately, you can get out ahead of customer demand to effectively use forecasts to make accurate supply plans. The solution is our CloudLogix platform.

CloudLogix Supports Demand Planning and Supply Planning

The connection between demand planning and supply planning is critical. To balance the needs of both demand planning and supply planning, we recommend utilizing CloudLogix to streamline your supply chain.

CloudLogix centralizes supply chain data and communication in one location so that all parties have access to the information they need when they need it.

  • Generate accurate reports instantly.
  • Gather information from customers via built-in communication functionality.
  • Produce configurable forecasts for all levels in your company.
  • View customer reports all the way from bids to approvals/orders.
  • Integrate with the tools and systems that your company already uses to seamlessly manage data across your supply chain.

Whether you are building forecasts to capture expected customer demand or using those forecasts to plan supply, you can benefit from CloudLogix. We invite you to learn more about our platform to simplify your supply chain.

Interested in scheduling a no-obligation demo of our platform? Get in touch with us to request a demo of our platform. We’ll show you more about how we support the needs of demand planning vs. supply planning!