Demand planning process flowchart (monthly consensus forecast)
Demand planning process flowchart template: baseline forecast, sales and marketing input, consensus review, gap reconciliation, sign-off and forecast accuracy.
How it works
Rename the lanes to your real roles
Replace Demand planner, Sales, Marketing, Supply planning and Finance with the roles you genuinely have. If the demand planner also runs the supply schedule, merge those lanes instead of drawing a handoff that never happens. If category managers rather than sales own the promotional view, put them in the Marketing lane and say so.
Fix the cycle calendar before anything else
Give every step a working-day offset: history cut-off, baseline published, sales and marketing input due, feasibility check, consensus meeting, sign-off, plan published. Demand cycles fail on lateness far more often than on method, and a late input is what forces the meeting to negotiate rather than review.
Put your own thresholds on the two decisions
'Forecast within tolerance of plan?' needs a stated tolerance as both a percentage and a value, and the level it applies at (total, category or item). 'Accuracy within target?' needs the measure you actually use and a target set from your own history, because volatile and stable items cannot reasonably share one figure.
Decide how commercial overrides are captured
Require every change to the baseline to carry a reason, a quantity and a period, so the consensus meeting reviews assumptions rather than opinions. Keeping the baseline and the overrides separate also lets you check later whether the overrides improved accuracy or worsened it.
State what the plan actually is
Write on the chart whether the published plan is unconstrained demand or already supply-constrained, whether it is in units, value or both, how far out it runs, and how new products with no history are handled. Most disagreements about a demand plan turn out to be disagreements about its definition.
Walk it against last month's cycle, then publish it
Take the cycle you have just completed and trace it through the chart. Every step people describe that is missing, and every step drawn but skipped in practice, is the finding worth acting on. If it becomes a controlled procedure, route it through approval so the version people work from is the version that was authorised.
Frequently asked questions
What are the steps in the demand planning process?
Extract sales history and shipments, cleanse outliers and one-off events, and generate a statistical baseline forecast. Circulate the baseline to sales for pipeline and known wins and to marketing for promotions and launches, consolidate the inputs into one plan, and test it against supply capacity. Hold the consensus review, compare the forecast to the plan or budget, reconcile any gap that falls outside tolerance, obtain finance sign-off, publish the plan to supply planning, and measure forecast accuracy and bias so the next cycle starts better than the last.
What is the difference between demand planning and supply planning?
Demand planning produces the view of what customers will buy, independent of whether it can be supplied. Supply planning decides how that demand is met: master scheduling, material requirements, capacity, production sequencing and purchasing. In this chart the handover is explicit, at 'Publish approved demand plan' followed by 'Convert plan into supply schedule'. Supply planning appears once before that point only to flag capacity constraints, so the consensus meeting is not agreeing a number that is already known to be unbuildable.
How does demand planning fit into S&OP?
Demand planning is the demand review, the first working step of a monthly sales and operations planning cycle. S&OP as normally described also includes a product or portfolio review, a supply review, an integrated reconciliation of demand, supply and finance, and a management business review where the plan is signed off at executive level. This template covers the demand review and the local finance sign-off that lets the plan be published; if you run a full S&OP cycle, treat the published plan here as the input to it rather than the end of it.
What is a consensus forecast?
A consensus forecast is a single agreed demand number produced by combining a statistical baseline with commercial knowledge that the history cannot contain: pipeline, known wins and losses, promotions, launches, delistings and price changes. The point of the meeting is not to average opinions but to agree which adjustments to the baseline are justified and to record why. Keeping the baseline and the adjustments separate is what later lets you check whether the human input added value.
How should forecast accuracy be measured?
Measure at the level and horizon you commit to, since accuracy at total level always looks better than at item level and says nothing about whether the right stock was made. Keep bias separate from absolute error: error size tells you how wrong the forecast was, bias tells you which direction it is consistently wrong in, and bias is the part fixable by changing behaviour. Compare results against a simple benchmark such as the previous period or the baseline before overrides, and set targets from your own history rather than a published figure, because achievable accuracy depends heavily on demand volatility.