Procurement Glossary
Requirements planning: systematic determination and control of material requirements
November 19, 2025
Requirements planning forms the foundation of an efficient procurement strategy and includes the systematic determination, forecasting and management of future material requirements. It combines production planning with purchasing processes and ensures a needs-based supply with optimal capital commitment. Find out below what requirements planning actually means, which methods are used and how you can successfully minimize planning risks.
Key Facts
- Requirements planning determines future material requirements based on production plans and consumption data
- Differentiation between primary, secondary and tertiary requirements depending on the planning level
- Deterministic and stochastic planning methods are used depending on the demand characteristics
- Digital tools and AI-based forecasts significantly improve planning accuracy
- Effective demand planning reduces storage costs by up to 25% while maintaining security of supply
Contents
What is requirements planning? Definition and goal in the process
Requirements planning refers to the systematic determination and forecasting of future material requirements to ensure needs-based procurement.
Core elements of requirements planning
Requirements planning comprises several central components that are interlinked:
- Quantitative determination of requirements based on production programs
- Timing of material requirements
- Qualitative specification of the required materials
- Consideration of stock levels and safety reserves
Demand planning vs. demand assessment
While the determination of requirements records the current requirements, requirements planning focuses on future-oriented forecasting. The requirements analysis provides an important basis for both processes.
Importance of requirements planning in Procurement
Professional demand planning enables strategic procurement decisions and optimizes the entire supply chain. It forms the basis for an effective procurement strategy and supports stakeholder management through transparent demand forecasts.
Process steps and responsibilities
Requirements planning follows a structured process with clearly defined steps and responsibilities between different areas of the company.
Systematic needs assessment
The first step involves collecting and analyzing data from various sources:
- Evaluation of historical consumption data
- Analysis of production plans and sales forecasts
- Consideration of seasonality and market trends
- Integration of stock levels and minimum quantities
Planning methods and procedures
Different planning approaches are used depending on the material characteristics. Deterministic methods are suitable for plannable requirements, while stochastic methods are used for uncertain consumption patterns. The material group classification determines the choice of suitable method.
Coordination and approval processes
Final requirements planning requires close coordination between Procurement, production and controlling. A structured approval workflow guarantees the quality and reliability of the planning results.
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Important KPIs and targets
Successful demand planning requires the continuous measurement and control of relevant key figures to evaluate planning quality and efficiency.
Planning accuracy and forecast quality
Forecast accuracy measures the deviation between planned and actual requirements. Typical target values are 85-95% depending on the material group:
- Mean Absolute Percentage Error (MAPE) as a standard key figure
- Bias measurement to identify systematic over- or under-planning
- Tracking signal for monitoring forecast stability
Inventory optimization and capital commitment
Effective demand planning optimizes the capital commitment period through needs-based inventories. Inventory Turnover and Days Sales Outstanding show the efficiency of inventory management.
Service level and availability
The service level measures the security of supply despite optimized stocks. Stockout rate and fill rate are key indicators for the balance between costs and availability in demand planning.
Process risks and countermeasures for demand planning
Inadequate demand planning can lead to considerable costs and supply bottlenecks, which is why systematic risk identification and management are essential.
Forecast uncertainties and planning deviations
Inaccurate demand forecasts lead to over- or understocking with corresponding cost consequences. A continuous deviation analysis helps to monitor planning quality and identify potential for improvement.
Data quality and system integration
Incorrect or incomplete data jeopardizes the overall planning quality. Robust data validation and the integration of different systems are critical success factors. Missing parts management must be closely interlinked with requirements planning.
Supplier dependencies and supply risks
One-sided supplier structures increase supply risks in the event of planning errors. Multiple sourcing strategies and systematic security of supply significantly reduce these dependencies.
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Practical example
An automotive supplier implements AI-supported demand planning for electronic components. The integration of production data, customer forecasts and market indicators improves planning accuracy from 78% to 92%. Inventory levels fall by 23%, while delivery capability increases to 99.2%.
- Data integration from ERP, CRM and external market data
- Machine learning for pattern recognition in consumption data
- Automated order proposals with exception handling
- Continuous monitoring and model optimization
Current developments and effects
Demand planning is undergoing a profound transformation through digitalization and new technologies that significantly improve planning accuracy and speed.
AI-supported demand forecasts
Artificial intelligence is revolutionizing demand planning through machine learning and advanced data analysis. AI in Procurement enables more accurate forecasts by processing complex amounts of data and recognizing patterns that traditional methods overlook.
Digital supply chain integration
The digital supply chain connects all planning levels in real time. Cloud-based platforms enable seamless integration of supplier data and significantly improve supply chain visibility.
Agile planning approaches
Traditional, rigid planning cycles are giving way to flexible, agile methods. These enable faster adjustments to market changes and support a responsive procurement strategy in volatile markets.
Conclusion
Demand planning forms the strategic foundation of efficient procurement and is developing into a highly precise management tool thanks to digitalization and AI. Successful companies invest in modern planning systems and create organizational structures for integrated demand management. The balance between planning accuracy, cost efficiency and security of supply determines the sustainable success of the entire supply chain.
FAQ
What is the difference between gross and net requirements?
The gross requirement comprises the entire planned material requirement, while the net requirement takes into account the available stock and quantities already ordered. Only the net requirements lead to new procurement activities and form the basis for ordering decisions.
What planning horizons are common in requirements planning?
Typical planning horizons range from weekly and monthly operational planning to strategic annual planning. The choice depends on material characteristics, delivery times and market volatility. Short-term planning is more detailed, while long-term planning is more of a framework.
How is planning accuracy measured and improved?
Planning accuracy is measured by key figures such as MAPE or bias. Improvements can be achieved through better data quality, extended analysis methods and regular model calibration. Continuous monitoring and adjustment of planning parameters are crucial.
What role does demand planning play in supplier selection?
Demand planning provides important information for strategic supplier decisions through volume forecasts and demand stability. It enables the evaluation of supplier capacities and supports negotiations through well-founded quantity structures and planning reliability.
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