Category Management Toolkit: Demand Management Overview



What is Demand Management?

Demand Management can be defined as -

“the alignment of a business’ consumption with its business requirements”

and is applicable to all commodities where internal demand and consumption can be influenced to reduce costs. Demand Management is a key aspect of a Category Management approach process and focuses on delivering end user organisation and behavioural change.

Where does it fit in with Category Management?

  • Supplier Performance Management
  • Quick wins
  • Initiative launch

What is included in this guide?

  • The principles of Demand Management
  • Demand Management Approach
  • Benefits of Demand Management

(Demand Management Overview Summary)

The Principles of Demand Management

The basic principles of Demand Management firstly that each business unit should have exactly what it needs in order to deliver it’s business objectives. Secondly that any resources consumed above this level represents a waste to the organisation. Thirdly there may be many and very different ways of meeting a user need, with each way representing a different level of resource to achieve the same outcome.

There are three strategies that could be adopted, that may be independently or jointly applied.

  • Eliminate
    • Is the requirement really needed? Can the consumption be stopped? e.g. cancel non-essential meetings, or stop the use of mobile phones for non-business calls
  • Replace
    • Can we use lower cost or more effective alternatives? e.g. use video-conferencing for meetings or replace laptops with desktops for non-mobile staff
  • Reduce
    • Can we use less of a product / service? e.g. don’t order a monitor with every PC purchase or schedule meetings for the same day

(Demand Management Overview)