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Single number in demand planning doesn’t mean a static number.
Supply Chain teams often refer to a ‘Single Number’ of demand. What they usually refer to is the demand view finalized in S&OP and kept unchanged through the month. This interpretation of single number is erroneous, leading to various issues in supply-demand mismatch.
What single number actually means is a single view of the demand outlook, to be used by all the functions (Procurement, Production, Logistics) as well as by the partners (Distributors, Vendors, Service providers). This is vital to avoid bullwhip effect created internally across functions and partners. It doesn’t mean that this demand outlook remains static through the month. It is essential that the demand outlook changes with time to reflect market reality at any point in time, based on the latest demand data and the market context.
Let’s move from static view to a unified view of demand across the entire supply chain. That’s a prerequisite for synchronising supplies with evolving demand and create a resilient supply chain.