One might say Gary Inscore is stuck between a rock and a hard place. On one hand, like many manufacturers, the director of master scheduling at printer manufacturer Printronix Inc. is contending with a much more globally distributed supply network and resulting longer supply lead times. Some of his spare parts and consumables suppliers, in fact, require lead times of up to six months.

On the other hand, Inscore must do his part to satisfy customers that are increasingly intolerant of delays in receiving spare parts. So determined is Printronix to keep customers happy that its CEO, Robert Kleist, insisted on putting its commitment to next-day parts availability right in the company's mission statement.

"That makes for a demanding environment," says Inscore, who recently upgraded Printronix's approach to demand planning from a largely manual process.

But Inscore isn't the only one being squeezed. Most manufacturers are being forced to negotiate between globally stretched supply networks and customers that won't accept out-of-stocks or long waits for finished goods. On top of that, many manufacturers are continually increasing the number and variety of products they sell, further complicating the task of planning.

As a result of that rising complexity, many organizations are realizing they must get serious about understanding and quickly responding to the demand side of the supply/demand equation. It's no longer good enough to try to assess demand using the battling spreadsheet method and demand forecasts based on last year's sales. Instead, many companies are migrating to tools that allow them to understand and respond to changes in demand more dynamically by monitoring demand based on real-time signals from multiple sources, collaborating easily with multiple stakeholders inside and outside the enterprise, and easily integrating demand plans with supply and production plans.

"Manufacturers are struggling to make traditional demand planning processes fit with reality because so many things keep changing," says Randy Littleson, vice president of marketing at supply chain services provider Kinaxis. "They have a critical need to continuously get a true sense of demand and then to be able to quickly make adjustments on how they are going to allocate supply so they can satisfy customers."

Indeed, because of the intensifying requirements of manufacturers to better understand and react to demand changes, many say they will enhance or replace their traditional demand planning systems soon. According to a recent survey of 336 IT and line-of-business executives by AMR Research, 34% of process manufacturers and 21% of discrete manufacturers said they would upgrade their demand management software tools or implement new ones over the next 12 months. The most commonly expressed reason for such investments was to improve profitability.

A Sweet Deal

Many companies are replacing tools that supported only static and isolated demand planning processes. One such manufacturer is Sunsweet Growers, a maker of food products for global distribution. Until fairly recently, the company relied on a few domain experts using spreadsheets and manual processes to track demand levels. The time-consuming process allowed Sunsweet's planners to do only some very basic analysis, such as determining the right inventory levels for make-to-stock items or what was needed in a given location to meet demand.

With transportation and other supply chain costs rising rapidly, however, Sunsweet needed a way to keep up with regional demand changes and easily analyze the wide array of choices open to the company in meeting changing demand levels. The company last year replaced its manual processes and tools with automated demand and supply management tools from Supply Chain Consultants. By automating the process, Sunsweet has achieved a more current view of demand and can update its plans as often as every two weeks.