Demand Planning Strategy
Paul Trudgian Ltd | Supply Chain & Logistics Consultancy No Comments

Supply chains have made a big shift over recent years: we’ve watched as customer demand has gradually gained greater power. For the most part, we’re generally adapting to this challenging environment well. However, within the shift towards a customer led, and dominated, marketplace there’s one thing we frequently see isn’t tough enough – your demand planning strategy. In the current supply chain landscape, you need a tough demand planning strategy which has been developed to withstand the bashing waves of customer demand.

Customer Demand is Becoming Increasingly Complex

We understand that you’re no stranger to dealing with customer demand. However, customer demand itself is becoming increasingly complex and an unwieldy beast to tame. This is due to a plethora of reasons.

Customers, particularly in the e-commerce sphere, want an increasingly personalised experience with options for customising their product as well as their interaction with your brand. They want to be able to operate in an omnichannel marketplace where they can pick-up and put-down between devices and means. They want to be able to assess your product, your brand, and your name in detail. Then, when they are ready, they want their order rushed through, prioritised, and delivered in a very short window of time. That’s before factoring in that they want seamlessly easy and low-cost returns, sustainable sourcing and socially conscious retailers and manufacturers.

That makes for an increasingly difficult playing field for the operators within the supply chain – you. Alongside this, you have new-style giant businesses, such as Amazon, who are seemingly equipped with both the tools that put them in another league and the economies of scale. How are you supposed to be able to compete, and indeed succeed?

Demand Planning Strategy is the Answer

The answer lies in giving due time and attention to your demand planning strategy so that you are being proactive and meeting the challenges head-on. However, this is only possible if you realise that the landscape in which you’re now developing your demand planning strategy is considerably different from the supply chain landscape of old. Your old tools are blunt – it’s time to trade them in for some new ones.

The demand planning tools you need to consider consist of both processes and technology. You cannot compete, or even cope, without the right supply chain technology on board. This then needs to be firmly placed in an environment which is process driven. You cannot ‘make-do’ with outdated technology that cannot handle today’s demands. Knowing which technology you need and want to procure will involve careful planning and thought in itself.

Powerful technology that enables appropriately tough demand planning is all about managing data on a big scale. Therefore, capabilities need to be a primary consideration. The technology needs to work for you, and not be a case of muddling along with something designed for a different purpose. This, in turn, will allow excellent collaboration between different players in the supply chain, increase visibility, and ensure you’re always acting and responding to up to date data. You can cut through the traditional silo model of supply chains and instead make accurate decisions.

The ability to make accurate and on-point decision-making is key. You need today’s data at your fingertips and be able to rely on it being accurate. It’s this accuracy and instant nature that will support decision-making. You will then be appropriately poised to both make a decision that’s needed and to communicate it to everyone within the business and the supply chain, as needed. Given that modern customer demand is a fickle being, this puts you back in the driving seat and able to respond appropriately, as needed.

This is achieved only through the right technology as well as specific demand planning processes and strategies:

  • Focus on Forecasting: Just because customer demand is fickle, doesn’t mean you should shy away from forecasting. In fact, taking a proactive approach is even more critical. However, this needs to be within the context of understanding that it’s a continual and ongoing process. It’s never-ending, and it will never be 100% accurate. Yet it does need doing and you need to be chasing the holy grail of accuracy even if you admit you can’t fully achieve it.

The way to do this is to focus on the accuracy and completeness of data from every stage in every process. So, sales figures should join together with marketing, which should join together with accounting and more. In this way, you begin to create a more complete view of what’s going on now, and what’s likely to go on tomorrow. This requires ongoing monitoring and analysis. You can identify trends and speedily respond to them. Think of the process as attempting to somewhat flatten the waves of customer demand that leave you all at sea.

  • Utilise Segmentation: As soon as you get the right technology on board, and with it vast reams of data, you need to create a way of simplifying things. To do this you can segment your supply chain. How you do this will very much depend on the nature of your supply chain, and your specific key performance indicators (KPIs). Through segmentation, you can balance customer demand, manufacturing processes, risk, and all the complexities you’re likely to encounter.
  • Prioritise Collaboration: Complex customer demand can only be managed with exceptional collaboration within your supply chain. This means you need to actively break down any silos and get everyone working together. This way you can be responsive to problems as they arise.

Once again, this is all only possible with the right technology and demand planning software on hand. The right technology will enable collaboration, enable you to analyse data, and create decision-aiding visibility.

However, knowing which demand planning software is best, and how to implement it can be a tall order. Our expert consultants are on hand to help. Call us on +44 (0) 121 517 0008 or email us at [email protected].

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