Consensus demand planning is a collaborative approach to demand forecasting that involves input from multiple stakeholders across an organization, and potentially outside the organization. This approach can help to improve forecast accuracy by taking into account a wider range of factors that influence demand.
The consensus demand planning process typically involves the following steps:
- Gather data. The first step is to gather data from all relevant sources, such as sales history, marketing data, and economic indicators. This data can be used to develop a baseline forecast.
- Identify key drivers. Once the baseline forecast is in place, the next step is to identify the key drivers of demand. These are the factors that have the greatest impact on demand, such as price, promotion, and seasonality.
- Develop a forecast. The next step is to develop a forecast by taking into account the baseline forecast, the key drivers of demand, and any other relevant factors.
- Collaborate with stakeholders. The final step is to collaborate with stakeholders to get their input on the forecast. This can help to ensure that the forecast is accurate, realistic and includes factors that are not captured in the first 3 steps.
There are a number of benefits to using consensus demand planning. First, it can help to improve forecast accuracy by taking into account a wider range of factors that influence demand. Second, it can help to build consensus among stakeholders, which can lead to better decision-making. Third, it can help to improve communication and collaboration across an organization.
Here are some examples of how consensus demand planning has been used by businesses:
- A large retailer used consensus demand planning to improve its forecast accuracy for new product launches. By taking into account input from sales, marketing, and product development, the retailer was able to reduce the number of product failures by 50%.
- A manufacturing company used consensus demand planning to improve its forecast accuracy for seasonal products. By taking into account input from sales, marketing, and production, the company was able to reduce its inventory levels by 20% and increase its sales by 10%.
- A service provider used consensus demand planning to improve its forecast accuracy for customer demand. By taking into account input from sales, marketing, and customer service, the provider was able to reduce its customer wait times by 50% and increase its customer satisfaction by 10%.
One note of caution is to measure forecast value added to make sure your consensus demand planning process does not reduce your forecast accuracy.
Overall, consensus demand planning is a valuable tool that can help businesses improve their forecast accuracy, build consensus among stakeholders, and improve communication and collaboration across an organization.