P2E EBOOK

Supply Chain Guide

to Evolve Your Demand
Planning Maturity

START EVOLVE ACCELERATE

Supply Chain Guide
to Evolve Your Demand
Planning Maturity
Disruption has dominated supply chain agendas over the past
two years as companies worked to accommodate some pretty
dramatic shifts in the marketplace.
But with disruption comes opportunity. With new appreciation for supply
chain as a growth driver, smart companies are now looking to level up
their ability to leverage supply chains for competitive advantage.
Gaining greater mastery of demand variability is a key part of that
quest. But one of the outcomes of the pandemic is that forecasting is
even more difficult today than ever. Demand has become more volatile
and complex, impacting not just finished goods planning, but raw
materials and semi-finished goods as well. With new channels, more
demand signals, shorter product life cycles, and growing geopolitical
and economic uncertainty, many firms are finding their current
capabilities inadequate.
According to Gartner1, “While fundamental supply chain planning
processes remain the same, supply chain planning leaders are under
increased pressure to drive supply chain planning performance. Business
leaders are asking for supply chain planning to be more resilient and
agile to demand changes and supply.” Add to this, “72% of companies
with a physical supply chain are at Stage 3 or below in their supply
chain planning maturity.”
Properly capitalizing on new market opportunities often requires
increasing your company’s ability to sense, analyze, plan, and shape
demand. Leveling up your demand planning capability is critical to
keeping pace with a fast-changing marketplace.
How Demand Planning has Changed
Because of all these changes, the definition of good demand planning
has evolved. These days, a demand plan must align with more areas
across the business, such as marketing, sales, and commercial teams;
even better is including external alignment. That means the planning
process requires more workflows and tools to enable collaboration, both
internally and with partners.
Planning processes must also now take into account more sources of
data, and then do more to reap value from that data to effectively plan
the business, from more data-rich, granular forecasts to greater use
of automation and artificial intelligence. Greater volatility in consumer
behaviors requires a sharper focus and a more end-to-end view.
To embrace the opportunities in this more complex market requires
continuously advancing your demand planning capabilities. Use this
guide to assess where you are now in your maturity journey, and learn
what steps it takes to level up your demand planning from where you are
to where you need to be headed.
https://www.gartner.com/en/supply-chain/role/supply-chain-planning-leaders
1
JOHNGALT.COM 2
1 Move beyond foundational demand planning
If your organization is like many
others in today’s marketplace, you
are executing demand planning at a
foundational level, and until recently,
this approach has been sufficient to
meet your needs.
According to Nucleus Research, “Most supply chain planning activities are still performed
on outdated legacy systems, ERP systems, and spreadsheets in an environment where
poorly informed decisions now inflict even greater business costs and undermine market
competitiveness.” John Galt Solutions’ research echoes this, revealing that the most
common tools used for this level of demand planning are highly configured spreadsheets
or a homegrown solution. Perhaps you use one of these tools, or picked up a light demand
planning or other point solution along the way. You may even be doing some planning in a
business intelligence tool, or in your ERP system.
In the face of all the new pressures in the marketplace, however, many companies like yours
are now finding that these tools offer limited breadth and depth. Because of their functional
limitations, you are likely unable to move beyond basic demand modeling and forecasting.
It’s also difficult to collaborate on the plan with all key stakeholders inside and outside your
organization.
Leveling up from these foundational capabilities to a more strategic approach should focus
first on these three capabilities:
Modeling your base demand, so you can forecast with greater accuracy.
Improving the forecastability of your data, which starts with understanding how you
should forecast by product based on the value.
Beginning to use statistical techniques, such as understanding how different models
and statistical results can improve your forecast.
There are others as well. To learn more, check out the white paper,
Five Tips for Forecasting Uncertain Demand.
JOHNGALT.COM 3
2 Level up to consensus-based planning
Once you have established competence
in developing a solid demand plan,
moving along the maturity curve means
transitioning to more collaborative,
consensus-based demand planning.
If you’re reaching this stage, you may have gaps in your demand signals that make it hard
to improve your accuracy. Or maybe you’re swimming in data, but don’t have access to
automation to perform routine tasks. A frequent roadblock is the inability to model across
different planning levels (product, customer and geographic levels), or challenges interpreting
and converting data such as volume conversions, measurement conversions, volume-to-
financial conversions, and currency conversions.
Priorities will differ depending on your organization’s particular situation. Through our work
with hundreds of companies like yours, we’ve identified the most common capabilities
needed to take demand planning maturity to the next level:
Enhancing demand sensing capabilities to better understand likelihoods, costs,
consumer behavior, and relative risk.
Incorporating key events such as promotions and new product introductions into
demand forecasting and planning activities.
Increasing power and automation, such as applying AI/machine learning and
beginning to create predictive and even prescriptive forecasts while also using what-if
scenarios and probabilistic planning.
Establishing collaboration and workflows and a shared end-to-end view across key
stakeholders including marketing, sales, suppliers, and commercial teams.
JOHNGALT.COM 4
3 Accelerate demand planning for competitive advantage
All the capabilities we’ve highlighted
so far are highly beneficial. At the
same time, it’s important to
continuously evolve your demand
planning prowess to keep up with and
outpace the marketplace.
Check out this white paper, The Practical
Role of Machine Learning and Artificial
Intelligence in Supply Chain, to explore
how you can accelerate your use of these
key technologies across your supply chain.
At this advanced stage, demand planning is all about network orchestration. You are ready to
maximize opportunities across your network and reduce the risk in your demand plan.
Chances are you are amassing a lot more diverse data now, and it all needs to be cleansed,
analyzed, automated, and synchronized end to end to deliver the most value. Expanding
organizational goals around strategic risk and social, economic, and environmental factors may be
placing new requirements on your planning. Often, organizations at this stage are bringing in more
data from the extended supply chain, require optimization capabilities, and are looking to further
automate, sense and shape demand.
With greater complexity comes an even greater range of priorities. Here, we’ve distilled common
focus areas for demand planning acceleration:
Deriving greater value from data, including taking in more diverse and longer-term demand
sensing signals, uncovering deeper insights into demand drivers, and synchronizing planning
activities end to end.
Automating and forecasting with AI/ML. This enables powerful new capabilities such
optimization or identifying root causes, creating more granular and accurate forecasts,
and considering new risk and environmental factors. AI/ML also generates predictive and
prescriptive actions.
Shaping demand, such as modeling operational and financial implications to maximize
profitability, reduce risk and boost customer service. Other key capabilities include attribute-
based forecasting.
Extending collaboration by linking planning activities to the extended supply chain network.
JOHNGALT.COM 5
Moving Seamlessly Up the Maturity Curve

Choosing a cloud-based, single data Here are some key capabilities to look for:
model solution to unify your planning
activities is key to aligning supply and Strength in identifying demand signals and translating that into demand and supply strategy
demand and achieving your financial and risk assessment.
goals at every step. A well-designed,
comprehensive solution architected Specific expertise across industries, since factors influencing demand vary widely by vertical.
from the ground up as an integrated
platform enables you to continuously No-code / low code platform where you can easily turn-on and tune features as you go.
level up your demand planning
maturity, with advanced capabilities Vision for the future of what demand planning will be and can be.
that take you from where you are today
to where market trends are leading. Track record in R&D innovation.

Strategic The 5-Step Maturity Curve

LEVEL 5
Positioning / Perceived Value

ECOSYSTEM
LEVEL 4 ORCHESTRATION

EXTERNAL
LEVEL 3 COLLABORATION
CROSS-
FUNCTIONAL
LEVEL 2 INTEGRATION

FUNCTIONAL
LEVEL 1 SCALE

SILOED
ACTIVITIES
Tactical

Inside - Out (Internal) Mindset / Focus Outside - In (External)

Source: Gartner

JOHNGALT.COM 6
The Importance of Evolving Demand Capabilities

Aligning supply and demand has never been
more important — or more difficult, thanks
to an increasingly volatile and complex
marketplace. The forces driving that market
change show no signs of slowing down.
That’s why it’s so important to continually
evolve your demand planning maturity.
With all the supply chain disruption that’s occurring, the last thing you need is to repeatedly upgrade or
replace the tools you’re using to take your planning capabilities the next level; you need one platform you
won’t outgrow. That’s why it’s important to choose a supply chain planning partner who can start from
where you are today and evolve alongside your developing skill set, supporting the transition and helping
you master more advanced capabilities along the way.
At John Galt Solutions, we partner with you across your entire journey, enabling you to start, evolve, and
accelerate your demand planning maturity without missing a beat.

CASE STUDY

How Reddy Ice Leveled Up

Demand Planning Maturity with
John Galt Solutions
As the US’ largest ice manufacturer, Reddy Ice distributes ice to more
than 80,000 grocery stores, convenience stores and other retail locations
across the United States. Demand for ice around the country can swing
significantly by location based on weather, season, and other factors.
Even still, Reddy Ice would visit sellers on a regular cadence regardless
of these external factors. The process was managed on spreadsheets
and revisited only a few times a year, leading to wasted trips or
unsatisfied demand.
After an exhaustive search, Reddy Ice chose John Galt Solutions’
Atlas Planning Platform. Atlas enables the company to automate demand
planning and re-plan replenishment every day for the next day, without
human intervention. That led to:
50% reduction in customer stock outs
Greater than 20% increase in delivery productivity
Sales increase of 20%
“Atlas has enabled us to become more profitable by allowing us to react
more quickly to changes in our customers’ demand,” says Grant Daniel,
Director, Demand Planning & Delivery Operations at Reddy Ice.
Once Reddy Ice gained mastery of this foundational level of demand
planning, the company was ready to take its capabilities to the next
level. The company evolved its demand planning maturity by adding new
data feeds, including point of sale data, weather forecasts, and Internet-
connected sensors in Reddy Ice Iceboxes that update Atlas every 30
minutes with inventory data.
This richer data means not only more efficient replenishment, but also
more granular visibility into demand patterns to fine-tune forecasts and
optimize their transportation planning. Today, Reddy Ice leverages its
industry leading forecasting and distribution capabilities as a competitive
advantage, offering sellers a sophisticated vendor-managed inventory
program with proactive deliveries so they never have to worry about their
stock levels.
John Galt Solutions has been its partner along the way, helping Reddy Ice
steadily increase its demand planning capabilities to support its growing
business.

JOHNGALT.COM 7
Partnering Your Way to Flexible, Efficient
Supply Chain Planning
Supply chains have never been more challenging.
But the tools to plan and manage them have never
been better. Partner selection is key to creating the
right pathway forward, so it’s critical to get a clear
view of both the supply chain planning software
itself and the people who stand behind it.
We encourage you to take a close look at how
John Galt Solutions does things differently.

JOHNGALT.COM 8