Demand planning is the process of predicting customer demand and forecasting future inventory needs in order to maintain healthy stock levels. The four main steps in the demand planning process are:

  1. Demand Forecasting – Analyzing historical data and other factors to estimate future demand.
  2. Inventory Planning – Determining the optimal amount of inventory to carry for each item at different times throughout the year.
  3. Order Management – Managing orders from suppliers, customers, and other sources to ensure that inventory levels are balanced with forecasted demand.
  4. Replenishment – Ensuring that inventory levels remain balanced by reordering items when needed and monitoring the flow of products from suppliers to buyers.

Successful demand planning requires an in-depth understanding of market trends, seasonal cycles, and customer behavior. By taking these steps in the demand planning process, businesses can stay ahead of customer demand and avoid costly stockouts or overstocking.