Demand Control – An often missing link in a demand management process

Demand Control is often described as one of the most critical and valued processes within an organisation. Yet, people neglect to include it as part of their Demand Management process.

Demand Management touches and influences virtually every functional business activity in the enterprise. It impacts the supply chain and its relationships with
customers, suppliers, and third-party providers, among others. And, Demand Management decisions directly impact a company’s financial, operational,
and customer service target objectives.

Demand Management principles and solutions have been adapted and deployed by companies — small, medium, and large — across a wide variety of business
and industrial sectors. Almost all have met with some degree of success toward improving sales growth and profit margins, lowering inventory, and increasing
customer service. Yet, many companies continue to struggle to achieve optimal demand performance that is consistent and sustainable.

One reason is the lack of a disciplined Demand Control process. And, from what we have witnessed, Demand Control is very misunderstood, misinterpreted, and often just plain neglected by companies.

Defining Demand Control

Let’s start with an explanation of what Demand Control is and what it is not.

Demand Control is not everyone from planners, to forecasters, to sales management, operations and supply chain management, and the chief operations officer
running around like their hair is on fire when orders exceed supply or when orders are less than planned. “Fire drills” are what happens when a formal Demand Control process is not in place and when decision-making authority and boundaries are not well defined.

Demand Control is a formal process of communication and decision making to keep demand and supply synchronised when demand materialises differently
than planned within near-term time fences. The process is used when demand is greater than supply over the near term and when actual orders are less than
the demand plan over the near term. An effective Demand Control process also involves mitigating risk and managing opportunity. Done well, Demand Control takes chaos out of the near-term planning process and stimulates actions that enable companies to improve customer service and increase sales revenue.