Gartner Research

Range-Based Demand Planning: Accuracy Trumps Precision

Published: 17 November 2017

ID: G00342173

Analyst(s): Marko Pukkila

Summary

Effective demand planning does not have to be an exact science. This research helps supply chain leaders responsible for demand planning establish a range planning capability that provides demand plans that are accurate enough to support scenario planning in their S&OP process.

Table Of Contents
  • Key Challenges

Introduction

Analysis

  • Develop a Range Plan by Calculating the Planning Process Control Limits With the Historical Forecast Errors
  • Determine If the Current Planning Process Is Good Enough

Demand Planning Process That Is "Good Enough"

Demand Planning Process Incapable of Meeting Requirements

  • Leverage the Range-Based Plan in Supply Chain Decision Making
    • Scenario No. 1: Consensus Plan
    • Scenario No. 2: Upside Opportunity
    • Scenario No. 3: Downside Risk

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