Prof. Jan FransooKühne Logistics University, Germany
From demand forecasting to actual demand planning: In times of Corona this is now for real
“Over the decade, the profession of demand forecasting has been renamed many times to reflect the broader designation of the role. Demand management has been a term that has often been deployed. The term suggests that this is not just about forecasting, but also includes the shaping of demand, for instance by pricing and management of promotions. Als the term Demand planning has been frequently deployed as well. This term suggests that the role also involves the allocation of supplies to the demand, or maybe even actively planning or shaping demand to meet supply.
In reality, however, many companies that have deployed alternative names for the forecasting role have not done more than actual demand forecasting, i.e. the estimation of future demand – often based on some algorithm that uses past sales information augmented with some human judgment. The current Coronacrisis however presents both a need and an opportunity to really develop this function.
With drastic demand changes, algorithms need to be shut off
Demand forecasting algorithms that are deployed are based on time series of previous sales. Most of these are using relatively simple statistical methods that extend and smoothen previous time series. […]”
Continue reading on Prof. Fransoo’s LinkedIn page.
First published on 3 April 2020