Demand & Supply Planning : Solving the Food Security Challenge — Africa and Post Harvest Loss

Demand Planning is all about managing and planning for customer demand. Supply Planning is about managing and planning the inventory supply to meet customer demand. Another definition of demand and supply planning is the process of forecasting the demand for a product or service so it can be produced and delivered more efficiently and to the satisfaction of customers. Demand planning is considered an essential step in supply chain planning. Supply planning is the component of supply chain management involved with determining how to best fulfill the requirements created from the demand plan. The objective is to balance supply and demand in a manner that achieves the financial and service objectives of the enterprise.

Let’s look at Demand Planning first;



Assessing future demand is one of the most appreciated activities your organization can undertake. A demand plan’s impact is felt throughout the business, from sales and marketing to manufacturing and distribution. When done correctly, demand planning can put you in an outstanding position to deliver outstanding customer service while meeting your business goals. As I said before Demand Planning is all about managing and planning for customer demand. Persons who are responsible for demand planning gather information from the sales and marketing, operations, and finance sections to estimate how much of a company’s products customers will want to buy at various points in the future. Better-quality demand planning provides countless benefits including Lower costs of inventory, Reduced waste , Increase in on-time, in-full deliveries, reduction in advanced shipping fees. Poor demand planning can also create too much inventory, which can lead to waste. Additional, less obvious costs, lost credibility, wasted resources.

Supply planning is the part of supply chain management involved with determining how to best fulfill the requirements created from the demand plan. The objective is to balance supply and demand in a manner that achieves the financial and service objectives of the enterprise. A supply plan is another component of the Sales and Operations Planning (S&OP) process. Supply planning comes after the demand planning Supply planning includes demand prioritization, procurement, capacity planning, supplier management, order scheduling, stockyard planning, hence different kinds of decisions are made during supply planning. Supply planning reduces the variability in production.

The efficiency of such planning involves in the accuracy of data. The supply planning process begins with an approved demand plan. If you are using a supply chain planning software system, such as DemandCaster, the demand translation step will automatically allocate the demand plan to the location where the demand for a specific customer/item relationship is typically fulfilled. An automated software system should then use the customer orders record to identify the ship-from location and then generate a forecast to be applied against a specific ship-from location.

In 1945 the Food and Agriculture Organization (FAO) was founded to reduce food losses and wastage. However, as of last year, it’s estimated that more than 30% of the produced food isn’t consumed. The World Bank estimates that for every 1% reduction in post harvest loss there is a $40M in output gain that goes back to primarily the farmers. Some reports have estimated the wasted food each year to be an amount that can feed 1.6 billion people. The total cost of the wasted food is approximately $1 trillion. The underlying issue is post harvest loss. Here is an alarming fact, by 2050 the world population is expected to be 9 billion people. Africa will contribute to half of that increase. Now, the only way these people will be fed is if food production is increased by about 70%.

More troubling is the fact that the production resources needed such as land and water are inelastic. This means that the only simple solution is cutting down the post harvest loss to ensure a higher percent of the food produced food reaches the population. This can only be achieved by accurate demand and supply prediction and planning. With such we can better collaborate the various stages of the supply chain. We can also reduce the cumulative effects of the agriculture markets causing shortages and crisis.

How accurate is the forecasting?

Random forest (RF) model has been used to predict sugarcane yield based on simulated biomass indices, observed climate and seasonal climate prediction indices. The forecasting accuracy reached 95.45%.

Not all models are as accurate and a lot of advancements in the application of big data have tremendously increased the accuracy of these models. Some key factors used in this prediction include; climate, demand for crop product, government policy,level of adoption of new technologies, crop cycle, promotion, price, seed used just to mention a few.

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Email: bkazora@alumni.purdue.edu

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