What does demand management in supply chains refer to?

Demand management in supply chains specifically refers to controlling customer demand while maintaining supply. This involves creating strategies to optimize the balance between customer needs and the capacity of the supply chain.

Effective demand management enables companies to ensure that they meet customer demand without overextending their resources or producing excess inventory. It typically includes forecasting demand, planning, and implementing actions that align supply with the anticipated needs of customers. This encompasses adjusting production schedules, managing stock levels, and coordinating with sales and marketing to influence and predict customer behavior effectively.

The approach involves understanding patterns and trends in demand and using this information to make informed decisions that enhance service levels while minimizing costs and inefficiencies in the supply chain. By managing demand effectively, companies can improve customer satisfaction and ensure that resources are utilized optimally.