What is the difference between demand forecasting and demand planning?

Demand forecasting is one component of demand planning. It focuses on projecting future sales volumes using historical data, statistical models, and increasingly, machine learning algorithms that detect patterns like seasonality, promotional effects, and trend shifts.

Demand planning takes these forecasts and turns them into concrete action. It involves adjusting forecasts based on business knowledge, coordinating with procurement and production teams, and building consensus through processes like Sales and Operations Planning. In simple terms, demand forecasting answers "how much will we sell?" while demand planning answers "how do we prepare the Supply Chain to meet that demand?"