Demand management practices in the manufacturing industry: An empirical South African perspective

This paper aims to identify and explore Demand Management (DM) practices used within the South African Manufacturing industry. The study followed a qualitative design approach in order to identify the relationship between DM methods such as forecasting, and the best practices used by the respondents. Therefore, a purposive sampling technique was used whereby a questionnaire was sent out via email to 15 manufacturing companies before meeting them for a face to face interview conducted in two weeks. Respondents varied from different industries such as automotive, wood and paper, chemical, food and beverage, etc. The results demonstrated that although the respondents are aware of the best practices for a good DM system, they generally do not apply them entirely because of factors like fear of implementing change and failure to quickly adapt themselves to the change that would come with those best practices. In addition, the results also revealed that forecasting is the most used DM method by the respondents and a simple forecasting average is used to predict future demand. Depending on the company, the forecast is done either by a team or by functional areas.

I. Introduction

The importance of satisfying the customer by meeting the demand has long been recognized by managers as crucial to making the organization successful. However, numerous problems occur and many factors need to be considered in order to give the customer what they want, how they want it, as well as where and when they want it. Failure to understand crucial characteristics of demand will result in supply shortage or excessive stock that will place serious financial burdens on the organization, subsequently leading to a loss of market share and customers.