Adding Strategic Demand Shaping to Your IBP Process

Predicting demand is one thing; shaping it is another altogether. Mature planning organizations have frameworks to shape demand up or down according to their strategic objectives. In this article we discuss the levers planning teams can pull to bring demand and supply into equilibrium, starting from either a position of excess or insufficient inventory. Techniques include pricing, launching/shortening marketing promotions, product substitution, and changing internal incentives etc. Crucially, we explore how to measure the efficacy of demand shaping activities by incorporating Forecast Value Add KPIs such as accuracy, error and bias with examples of real life ...