Demand planning is an integral part of the supply chain and perhaps the most crucial function of any enterprise. In this post, we look into the demand planning process for the manufacturing and service industries.
Demand planning refers to the future requirements for the products and services of the organisation. The process includes the identification, planning and management of the accurate and forecast business demands.
This strategic function in the organisation’s supply chain is essential to coordinate and ensure the production alignment to meet demand, and plays a key role in influencing production flows and incoming sales.
In the manufacturing industry, the demand planning function is responsible for managing the product demand and determining the raw materials and other goods required, which influences the procurement process.
Demand planning is usually managed through a suitable management system such as MRP (master resource planning).
Demand planning needs a consensus to take place regarding forecasts. Therefore it acts as both the gatekeeper since data needs to be approved before entering the MRP system and the arbitrator (since the information is required for fine-tuning forecasts).
The new release of Dynamics 365 for Operations is Microsoft’s new business solution for medium to large organisations. Dynamics 365 for Operations was previously known as AX7 and is a single software system that helps run businesses more effectively. It is a digitally transformed financial and operational ERP system.
Once the data has been entered into the system, and the forecast is not met then the demand planning function reacts accordingly, under appropriate controls, to tune the demand signal.
This function has the benefit of providing constant monitoring and viewing, which can be accessed by management to assist with any issues and determine future business trends.
Software systems such as Dynamics 365 for Operations or Dynamics AX can assist with effective demand planning and support processes like capacity management and stores requisition management.
Furthermore, the increasing business requirements to access and review timely demand data and inventory levels across the organisation warrants the application of a cloud-based integrated management system.
This way departments such as operations and financials can communicate and collaborate to ensure production meets the needs of demanding customers.
Dynamics 365 for Operations, previously known as AX7, is a single software system that helps run businesses more effectively. It is a digitally transformed financial and operational ERP system for medium and large organisations.
Master Resource Planning (MRP) is a key component of AX. SRM is embedded within AX which means that it enhances the functionality of MRP.
Microsoft Dynamics for Operations
Contact Decision Inc. Immix and speak to one of our experienced Microsoft Dynamics ERP consultants if you would like to see how Dynamics AX/Dynamics 365 for Operations can help your business.