Since demand and supply planning is an inherently complex process that is unique to each company, DemandCaster is built with numerous modules and settings that help all types of manufacturers and distributors model they’re planning to mimic their reality.
To help users learn how to configure DemandCaster to meet their planning needs, the DemandCaster documentation site includes a multitude of articles that will help you learn and navigate the many options and functions within the software. The outline below is a list of rules, suggestions, and helpful articles to get you started.
We have organized the document in major sections to introduce you to the functional structure of the software. Each section includes a summary with links to other articles that provide a deeper dive into the specific functional area. After each major section, please feel free to reach out to us by emailing email@example.com to request a follow up of the section covered. We have found that the best way to learn the software is reading the section first, working with the software, and then asking us questions concerning any area that is unclear or you require more information or assistance.
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What does DemandCaster do?
The primary purpose of DemandCaster is to help user set an items order point. The inventory reorder point (order point) is the basis for establishing a companies optimal inventory levels (the level between too much and too little) when the following variables are taken into account.
- Replenishment lead time - the longer the lead time the more inventory must be carried on hand and on order.
- Volatility of historical demand - the higher the volatility, the more uncertainty, and the more inventory must be carried.
- Projected (forecasted) demand during the lead time
- Desired level of customer service - the amount of extra inventory to carry to accommodate demand or supply uncertainty.
An items order point is calculated as Forecast Over Lead Time + Safety Stock in the Basic Forecasting and Inventory Platform as described below. With the S&OP Add-On, the forecast portion is defined in the Demand Plan and the Safety Stock is calculated in the Supply Plan. The Order Point is used in day to day requirement planning upon approval of the S&OP plan.
The article Basic Order Quantity and Replenishment Logic provides an overview of the order point logic.
Basic Forecasting and Inventory Planning Platform
The Basic Forecasting and Inventory Planning platform is the most straight forward method to plan items. It is designed to produce item level forecasts by taking an items total history within a location (if DRP is enabled) and projecting a demand forecast that drives a supply plan.
The Basic Forecasting and Inventory Planning platform is highly dependent on the best fit forecasting algorithms and historical demand to generate a reliable result. Though the DemandCaster forecasts are unit based forecasts thus revenue is not a formal part of the planning process making it less conducive to collaboration with sales. In addition, the forecast is based on total sales and therefore there is no simple way to forecast by customer within the Basic platform.
The focus of the Basic DemandCaster Planning and Forecasting platform is on the supply side with inventory optimization, requirement planning, and distribution planning. This platform is a great choice for operations looking to improve planning but are unable to secure consistent input from sales.
Sales and Operations Planning Add-On
The Sales and Operations Planning Add-On builds on the capabilities offered in the Basic Platform. It is based on the premise that statistical forecasting alone, as provided in the Basic Platform, can take you so far.
The Sales and Operations Planning Platform is about demand and supply alignment by taking the forecasting process back to sales and marketing for their input and adjustments. Edits to forecasts can be made at any level of the hierarchy (customer, item, product class) and the changes roll top down and bottom up. Pricing may be modified to change revenue projections. Promotion and one time events may be layered in via the 4-P Module and most importantly actual to plan performance is tracked on an ongoing basis.
Once the Demand Plan is reviewed and approved, a Supply Plan may be generated based on a level loaded or demand chase supply plan model. Thereafter the impact of the plans may be reviewed against inventory and capacity. The platform also allows for adjustments to be made in a sandbox environment prior to approving for to day to day requirement planning execution.
Where the real value and performance is derived is via collaboration. This is because all parties are aligned using the same set of data and sales and marketing directly drive operations. As a result, excuses start to go away and accountability is driven. Studies have proven that companies that are best at demand planning/ forecasting average 15% less inventory, 17% stronger perfect order fulfillment and 35% shorter cash-to-cash cycle times, while having the tenth of the stock-outs of their peers.
Systems settings are the general DemandCaster settings that are applied to all items within the DemandCaster platform. When starting to use DemandCaster, we recommend reviewing and then editing the base planning policies in system settings. In most cases, the current settings that are applied will be applied during setup based on your planning policy questionnaire. However, we do suggest that you review each setting along with the articles in the section System Settings to understand the definition and purpose of the system settings.
DemandCaster analytics are designed to help users focus on the most important items and also help review and modify planning settings and other variables so that appropriate planning and stocking policies may be applied.
The analytics are built with a logical sequential workflow as described below and organized in the Analytics menu group:
- The Classification analytic sets the Business Importance (BI) by item and location (if applicable).
- The Segmentation analytic sets the Order Frequency (OF) and Accuracy (A)
- The Lead Time analytic calculates the actual versus stated (planned) lead time by item and location (if applicable).
- The Stocking analytic is run for recommendations on what should be stocked and maintained in inventory versus not stocked and made or purchase to order.
- The Forecast analytic provides the detail of the forecast source including statistical measures.
- The Stocking analytic and Lead Time analytic drives the Order Point Calc which calculates the safety stocks and order points for those items that are stocked.
- On a periodic basis (monthly is recommended) the Order Point Review analytic should be reviewed to assess actual to plan performance among other metrics to assess if any of the set parameters need to modified.
Continue to navigate through the balance of the articles in this section to gain a deepter understanding of the structures and settings of the DemandCaster software application.