Mind the gap – Assessing maturity of demand planning, a cornerstone of S&OP

The purpose of this paper is to develop and empirically validate a model for assessing demand planning maturity in organisations.

The authors developed a maturity assessment model for demand planning through iterations of theoretical and empirical work, combining insights from literature and practitioners. An online survey is developed to validate the model using data from different industries.

The authors identify six dimensions of demand planning maturity: data management, the use of forecasting methods, the forecasting system, performance management, the organisation and people management. The empirical study indicates that demand data are well managed and organisation readiness is high, yet improvements in the forecasting system and the management of forecast performance are needed. The results show a positive relationship between the size of an organisation and its demand planning maturity.

The contribution of this work is to propose an assessment model and survey instrument for demand planning maturity. This will help the practitioner to understand the current level of maturity of the demand planning process, reflect on the desired level and develop action plans to close the gap.

There is broad literature on process maturity assessment in general and on sales and operations planning (S&OP) maturity in particular. However, there is no comprehensive model for assessing the maturity of demand planning, which is a specific and critical process within the overall S&OP process. The authors fill this gap by offering a demand planning maturity model.