demandmanagement

Demand management is a discipline that aims to forecast, influence, and shape customer demand to align with an organization’s capacity and resources. It seeks to understand demand patterns, anticipate volumes, and implement strategies to balance supply with demand, reducing bottlenecks, stockouts, and inefficient utilization of assets.

In the energy sector, demand management—often referred to as demand-side management or demand response—reduces or shifts electricity use to fit generation and grid capacity. Tools include time-of-use pricing, incentives to shift load, automated demand response, and energy storage to smooth peaks and improve reliability.

In business operations and information technology, demand management covers forecasting and shaping demand for products or IT services. It involves demand forecasting, capacity planning, pricing and promotions, product and portfolio decisions, and coordination across sales, marketing, supply chain, and IT. In IT service management, demand management informs capacity planning and service level commitments by analyzing patterns of business activity.

Techniques include quantitative forecasting (time-series models, regression), scenario planning, and market signals integration; demand shaping through pricing, promotions, product design, or feature prioritization; and capacity planning that aligns resources with anticipated demand. Metrics such as forecast accuracy, service levels, asset utilization, and cost per unit are used to monitor performance.

Benefits include improved customer satisfaction, lower operating costs, and better asset utilization. Challenges involve forecast error, demand volatility, data quality, and the need for cross-functional governance to implement demand programs.