Demand Planning
A Demand Plan forecasts, for an Item at a Location (and Subsidiary, if your plan uses them), how much you'll sell over the coming months based on your actual sales history. The system automatically calculates a "Calculated Demand" per period, which you can adjust by hand whenever you know something the calculation can't anticipate — a promotion, a one-off event, a new customer coming on board. It's meant to be the basis for deciding how much and when to buy or manufacture.
What is it and what is it for?
Each Demand Plan groups two kinds of monthly periods:
- Historic (analyzed) periods: the actual sales from past months the system used as the basis for the forecast, including, when applicable, the days the item was out of stock.
- Projected (future) periods: the "Calculated Demand" the system estimates for each future month, and the "Adjusted Demand" you can correct by hand before using it.
You can create a plan two ways: individually, specifying a single Item and Location, or in batch, generating plans for many items at once (filtering by Class, Family, Brand or a specific Item). These plans also feed the Reorder Level report, enabling the suggestion and direct creation of Purchase Orders from there.
How to use it
- Create an individual plan with the New button: specify the Date, the Subsidiary (if your plan uses them), the Location and the Item. The system builds 12 monthly periods for the current year, which you can edit under "Adjusted Demand" before saving.
- Or generate several plans at once with Batch Create: choose the Subsidiary and Location (required), and optionally filter by Class, Family, Brand or a specific Item.
- Configure the calculation in Batch Create: how many months of history to analyze (1 to 36), how many months to project forward (1 to 12), how many standard deviations (sigma) to exclude as outliers, whether to adjust for out-of-stock days, and which projection method to use.
- Run the calculation with the Process button. If you picked a single Item, the plan is generated right away and takes you to its Details; if the filter can cover several items, the calculation is queued as a background Process (Processes screen), since it can take a while.
- Review a plan's Details: the chart compares sales history against projected and adjusted demand, with shortcuts to the item's Movement Report and the Sales Report by Month for the same Location and period.
- Edit the plan whenever you need to manually correct the "Adjusted Demand" for a period, without losing the system's original "Calculated Demand" as a reference.
Key capabilities
- Automatic calculation from your actual sales history (in the item's Report Unit of Measure), instead of starting from a blank slate.
- Three projection methods depending on your setup: Average, Linear Regression (with its R² coefficient of determination) and, if your company has the feature enabled, Single Spectrum Analysis (SSA) for time series.
- Outlier exclusion from the history by choosing how many standard deviations (sigma) to discard.
- Out-of-stock day adjustment: if an item was out of stock part of a historic month, the system can estimate what it would have sold with stock available.
- Batch creation filtered by Location, Subsidiary, item Class, Family or Brand, to generate many plans in one shot.
- List column customization (show, hide and sort), just like the rest of AdmCloud's lists.
Key fields
| Field | What it's for |
|---|---|
| Number | The plan's automatic number; can't be edited or duplicated. |
| Date | The plan's date, used as the year/month reference when it was generated. |
| Subsidiary | Only shown if your plan uses Subsidiaries. Required in that case. |
| Location | The warehouse/store the demand is being forecast for. Required. |
| Item | The item being forecast. |
| Periods to Analyze | How many months of history the calculation uses (between 1 and 36). Only applies to Batch Create. |
| Periods to Project | How many months into the future are calculated (between 1 and 12). Only applies to Batch Create. |
| Exclude Deviations (sigma) | How many standard deviations are discarded from the history as outliers before calculating. Can't be negative. |
| Adjust out-of-stock days | When checked, the history corrects the months the item was out of stock, estimating the lost sale. |
| Projection Method | Average, Linear Regression or Single Spectrum Analysis (SSA); you can also leave the item's default configured method. |
| Calculated Demand | The automatic calculation's result per period. Read-only. |
| Adjusted Demand | The value that's actually used; it starts equal to the Calculated Demand and you can correct it by hand, period by period. |
Validations on save
- The Location, the Item, its unit of measure and the Subsidiary (if specified) can't be voided.
- The plan must have at least one period.
- The plan's number can't be duplicated, or changed once the document has been created.
- Future periods can't overlap in dates with those of another plan already saved for the same Item, Location and Subsidiary; the system shows you the existing plan's number.
- In Batch Create: Location is required; Periods to Analyze must be between 1 and 36; Periods to Project between 1 and 12; the Sigma to exclude can't be negative; and if your company has more than one Subsidiary, you must specify which one.
- Batch Create only generates plans for active items, of type Item (not Service or Kit), with a Report Unit of Measure and a Planning Unit of Measure configured, and flagged to "Include in Demand Planning Generation." An item in the filter with no sales in the history simply doesn't get a plan.
Availability
- Browsing, creating, editing and deleting Demand Plans requires the "Demand Plans" permission on your user group, with separate levels for each action.
- The full feature requires the add-on Demand Planning module active for your company; if you don't see this option in your menu, contact AdmCloud to have it enabled on your plan.
- For an item to show up in Batch Create, it must have "Include in Demand Planning Generation" checked on its record (Inventory tab).
- The Single Spectrum Analysis (SSA) projection method only appears if your company has that feature enabled; otherwise only Average, Linear Regression and the item's default method are available.
- The Subsidiary field is only shown and required if your plan has Subsidiaries enabled.
Tips and common mistakes
"A plan already exists for the same item and location...": means there's already a plan with future periods that overlap the one you're trying to create. Open and edit the existing plan instead of creating a new one with the same dates.
Batch Create can take a few minutes. If your filter covers several items, the calculation runs in the background; check the Processes screen for progress and the plans generated, instead of waiting on the same screen.
An item doesn't show up in Batch Create results: check that it's active, that it's of type Item (not Service or Kit), that its Report and Planning units of measure are configured, that it has "Include in Demand Planning Generation" checked, and that it has recorded sales within the historic period being analyzed.
Use "Adjust out-of-stock days" for items that ran out of stock. If an item was out of stock part of the history, without this adjustment the system will underestimate its real demand; with it on, the calculation compensates for those days using the item's average daily sales.