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elctrnx_lyf
User Rank
Supply Network Guru
Demand simulation
elctrnx_lyf   6/20/2012 3:25:46 PM
NO RATINGS

I believe many of the big manufacturing houses employ certain kind of software to analyse the demands for the products and also provide the results to the planning team to create the right manufacturing plan. But most of the times these software could be commercially available with lot of customisation requirements.

Barbara Jorgensen
User Rank
Blogger
Materials planning
Barbara Jorgensen   6/20/2012 4:00:35 PM
NO RATINGS

I'm out of my league when it comes to software. I'm sure there are out of the box solutions, but in manufacturing and supply chain, most of them seem to be customized. I think SaaS is supposed to replace that to some extent.

TaimoorZ
User Rank
Supply Network Guru
Re: Demand simulation
TaimoorZ   6/21/2012 3:58:47 AM
NO RATINGS

"I believe many of the big manufacturing houses employ certain kind of software to analyse the demands for the products"

@electrnx_lyf: I've worked on the development of these software, but there's a certain limitation to them. They can take into account past trends and other inputs like external factors but the output rarely matches the actual demand. This is because there's so much volatility out of the scope of the software and you cannot take into account all of it.


TaimoorZ
User Rank
Supply Network Guru
Re: Materials planning
TaimoorZ   6/21/2012 4:04:38 AM
NO RATINGS

"I think SaaS is supposed to replace that to some extent."

@Barbara: SaaS is a very useful way for manufacturers to use these demand planning software. Through SaaS, they do not have to purchase the software themselves and deploy it. Hence, they save on the hassle of managing it. Besides this, they don't pay for it once and can pay as they use the service. This makes SaaS as a cost-effective option.


Himanshugupta
User Rank
Supply Network Guru
Re: Demand simulation
Himanshugupta   6/21/2012 10:00:14 AM
NO RATINGS

@TaimoorZ, i wonder what kind of engine is deployed in these softwares so that the software is useful to some extent. I do not know whether my comparison is applicable or not but financial industry also faces a lot of uncertainity on a daily basis and there are risk management departments which lower the risk exposures. Can similar algorithms be useful in managing the inventories, i wonder.

TaimoorZ
User Rank
Supply Network Guru
Re: Demand simulation
TaimoorZ   6/21/2012 12:38:39 PM
NO RATINGS

@Himanshugupta: It varies from industry to industry but in order to predict demand, the software looks at historical data for the last few years and for the relevant time period (month, week, day etc) and the growth factor. It also considers other factors that influence demand and are not reflected by the trends. This could include extra demand for a product because of a promotion or weak demand because of the launch of another competing product etc. All these together help in giving an estimate of the demand.





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