However, waiting for the disruption to subside is not a viable strategy. Instead, consider developing capabilities that will allow you to operate efficiently amidst ongoing uncertainty, focusing especially on demand planning.
The Challenge of Demand Planning Amid Uncertainty
Demand planning and uncertainty are veritable nemeses. If your approach has involved defending your business one strike at a time, your demand planning strategy is likely worse for wear. Its armor is dented and chinked and needs an upgrade to suit these lasting, volatile conditions.
This upgrade should involve a more intentional inventory analytics program that puts your demand planning on the offense. This program should be capable of more accurate forecasting, faster pivots, and more efficient inventory management despite less predictable demand. Tools like Inventory FOCUS+ can be instrumental in achieving this.
By closely examining your demand planning strategy, you can better understand the new distribution landscape, how it has transformed, and how improved processes, advanced technologies, and retraining can give you an advantage.
Key Areas Influencing Demand Planning
Three main areas factor into demand planning. Each has undergone significant shifts, and you might be surprised by the differences today versus one or two years ago. For each, ask yourself:
1. Product Mix
Understanding the state of your product mix is essential to optimizing that mix and improving demand forecasting. Look closely at individual product categories to learn how they perform compared to the same period in previous years. What is different? Are you losing value on any products? Could you capture more opportunities with others?
Define categories for product performance, such as:
Use your data to determine if performance ties to factors such as location or seasonality. Once you have a clear picture of your current product mix, you can better align your working capital to actual product performance. A tool like FUSION Analytics can provide real-time insights to support this.
2. Customer Mix
Customers drive demand fluctuations, so it’s helpful to understand their motivations, concerns, and needs as you revamp your demand planning strategy. Analytics can reveal the drivers behind trends, such as surges and slumps, helping you better understand and act on what the data is telling you.
Is a specific type of customer driving a surge in demand? Has a region you serve reduced usage of a product? Identifying whether trends are occasional or consistent will help you plan better. Utilize Sales FOCUS+ to gain deeper insights into customer behavior and adjust your strategy accordingly.
Assess supplier performance and consider diversifying sourcing as part of your demand planning strategy. Have you struggled to source specific products from certain suppliers when demand is high? How can you better protect product availability? Supplier FOCUS+ can help streamline supplier management and enhance your sourcing strategies.
Optimize Demand Planning with Inventory Analytics
Monitoring these three areas means you will have tabs on the most critical factors for demand planning. Your data can tell you what is happening with inventory and customer demand today, helping you determine what’s next or pivot if an unexpected change occurs. With an intuitive, sophisticated platform for your analytics program and purposefully designed dashboards, you can use what you learn to improve demand planning, inventory management, operations, and more.
For example, if a product is consistently in the “slumping” category due to decreased demand, you can act to optimize your inventory. Or, if you identify a high-value customer for whom you are constantly short on product, you can focus resources on that customer and improve stocking of that product. You can dive deeper into pricing with Price PERFECT, which can aid in adjusting pricing strategies to reflect current demand accurately.
Having relevant, real-time data that reflects your business activity will help you strategize more effectively and continually optimize as change and disruption continue.
Does your team have the tools and training necessary to execute this analytics plan? Contact us today if you want to upgrade your armor and find balance through change!