This process describes each activity in the Demand Planning (DP) cycle. In general, you can assume that the order of the processes presented here is the order in which you should proceed through the DP cycle. However, since DP is represented as a cycle, not a linear path, you may decide to repeat certain activities or to proceed in a different order.
The following diagram depicts the DP cycle.
1. Carry out all the steps needed to set up your planning area. The planning area is the basis for all activities in APO Demand Planning. It is a collection of parameters that define the scope of all planning tasks. The planning area is linked to the data mart. You load into the data mart the actual history (for example, bookings, shipments or billings) that wlíll be used to create the DP master data and generate the demand forecasts. See Planning Area Administration.
2. Map the structure of your company (for example, regions, divisions, brands, products and customers) for planning purposes in the DP master data. See Master Data Setup.
3. Configure the layout of the planning screens for the different parties (departments, managers, divisions, and so on) who will participate in demand planning by designing planning books. Define macros to perform calculations, carry out tests, and warn you of exceptional situations. See Planning Book Design.
4. Define forecast models for time series forecasting, causal analysis and/or composite forecasting. See Definition/Redefinition of Forecast Models.
5. Create a forecast of market demand using a top-down, middle-out, or bottom-up approach. Choose from a wide variety of forecasting methods and techniques. See Creation of the Demand Forecast.
7. Plan promotions and other events. Examples of promotions are free-standing inserts, coupons, discounts, product displays, trade shows, dealer allowances, coupons, contests, and advertising. See Promotion Planning.
8. Fine-tune the demand plan by adding management overrides and modifications. See Fine-Tuning of the Demand Plan.
9. Reconcile the demand plans of different departments by merging the plans into a one-number, consensus forecast. See Reconciliation of Demand Plans.
10. Simulate different planning scenarios. See Simulation.
11. Monitor exceptional or critical situations through the Alert Monitor. See Monitoring Alerts for Demand Planning (DP).
12. Make the demand plan available in SNP by releasing it. The demand plan is often unconstrained by any production or distribution restrictions. This step can be completed by either the demand planner or the SNP planner. See Release of the Demand Plan to SNP.
13. Make the SNP plan available to DP by releasing it. The SNP plan takes into account any production or distribution restrictions. A comparison of the two plans could lead, for example, to the opening of a factory to meet demand in a new market region. See Releasing the Supply Network Plan to Demand Planning.
14. Store the forecasts made at different times for a period. See Forecast Storage and Further Processing in Other Systems.
15. Update the actual data. See Historical Data Updates.
16. Verify the accuracy of the forecast; for example, by comparing it with the constrained forecast from SNP, with actual data and with other demand planning versions that you did not release to SNP. See Monitoring of Forecast Accuracy.
17. Revise the master data to reflect the addition of new products, customers, and so on. See Master Data Revision.
18. Refine the forecast models in the light of knowledge gained from forecast accuracy checks. Add new models for new products and product lines. See Definition/Redefinition of Forecast Models.
The result of Demand Planning is the demand plan.