Demand Shaping & Optimization with AI-powered Driver-based Forecasts

Traditional approaches to Demand Forecasting are trend-extrapolation based, similar to driving a car by looking into the review mirror. This is intuitively dangerous, and now increasingly fatal given polluted history due to pandemic and other disruptions driven by wars and recessionary pressures, etc. What Demand Planners need is a forward-looking engine that can both enable demand forecasting based on relevant driver trends as well as enable an interactive demand shaping or an automated demand optimization powered by AI. Such Demand Shaping & Optimization is critical in the bi-directional orchestration of Demand and Supply in a mature IBP process. Typical IBP solutions follow an archaic sequential S&OP process of Demand Review followed by Supply Review. This approach locks a Demand statement, then tries to identify the least cost based supply response. Flaw with this cost optimization approach is that it misses out on margin optimization opportunities: through modeling changes in pricing, promotions, new product launch schedules, etc. to leverage current supply & capacity to optimize margin.