Last week I wrote a blog on Demand Poetry… well actually more on the need to use demand assumptions in the forecasting process. You can read it here: https://supplychaintrends.wordpress.com/2011/06/02/forecasting-poetry/.
That made me think about the use of demand assumptions and other types of demand terminologies used in day to day forecasting and planning jargon. I made a 3 question survey to get some insight in terminologies used. I discuss results below. Thanks to all who participated.
There were 31 participants from 12 countries. Most participants report in to the supply chain function or are working in consulting. See the two graphs below for the details
Main insights I would take away from the participants answers on demand terminologies:
1. Traditional terminology is still key: Demand Planning (90%), Demand Management (58%) and Demand Forecasting (84%) are the most used terminologies by far by the participants. This was no surprise to me. The bigger question maybe is what everybody means with these terms.
2. Demand Assumptions is not at the heart of planning yet: 35% of participants uses this term in their job. To me, advanced demand planning, S&OP, IBP is not possible without having well documented and updated assumptions at the heart of the discussions. According to this result we have some way to go
3. Modern terminology usage: my hypothesis was that modern terminology like Demand Shaping and Demand Sensing is mostly North American terminology that is promoted by several consulting groups. I did not test this hypothesis, but in this little survey mostly consultants used these terms. The DD Supply Chain is also in this category for me. It has its place and use for sure, but let’s make sure we don’t assume its common language. Other interesting fact is that we use Demand Shaping more than Demand Assumptions. How are we going to put action in place to shape demand cross functionally, if we did not make clear how, and based on which assumptions, we’re going to do that?
4. Planning is not execution: although Demand Control and Demand Execution can be defined as part of overall Demand Management, the participants tell that these short term, more executional terminology, are not part of day to day planning jargon
That’s it for me. Thanks again for participating. Anything else you would like to add? See the final graph with results below:
One thought on “Demand Terminologies”
I’m surprised to see that there are 10 terms for demand. This is the evidence that there should be kind of unified term for demand thing in order to help practitioners in supply chain communicate more effectively.