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A Demand Planning Strategy for the 21st Century Supply Chain

Connected

Recent technological advancements have caused a seismic shift in how individuals interact with businesses. The expectation that consumers should receive instant, cost-effective, and personalized experiences is here to stay, and companies will rise and fall on their ability to scale their operations accordingly. 

Agility is, therefore, the name of the game, with companies needing to seize opportunities to engage customers and then immediately deliver on their promises. Given that the latter is highly dependent on a company’s particular S&OP processes, make sure your company is poised for success by employing a frictionless (and connected) planning strategy — that is, one that efficiently links your demand planning process to all departments and business objectives and one that is sensitive to even the slightest changes in demand. So let’s assess how to plan for a successful Demand Planning Strategy.

 

What are the main characteristics of a frictionless demand planning strategy?

Frictionless is key. Too many companies implement a demand planning approach that conflicts with other parts of their business. If you’re struggling to decide when and in which quantities to order from your suppliers, what products to manufacture, and how to avoid stock-outs or having too much inventory, these are signs that your company’s business operations are in conflict with each other. Continuing to operate with these pain points means you’re wasting time and money, which hinders growth. We’ve found that effective planning strategies have the following in common:

 

  • Overall strategic objectives directly guide the day-to-day

Forecasting and demand planning shouldn’t exist in a vacuum. Clearly define what you’re forecasting for, the level of detail desired, the consumer profiles you’re targeting, and the reasons for looking at demand in this way. Your demand planners will then be able to make business decisions (such as which forecasting methods to use or how to prioritize orders in the event of an inventory stock out) that support your specific goals. In some cases technology is there to help automatically make that best choice in forecasting method for you.

 

  • People along the supply chain can easily communicate and collaborate

A frictionless planning strategy is a connected planning strategy. You need to make sure all the key stakeholders are connected to each other. A common platform where all involved can communicate and collaborate eliminates confusion and reduces the risks — like version control or overlooked data — associated with passing Excel spreadsheets or other files back and forth via e-mail or a chat app. Everyone is kept in the loop with minimal effort.

 

  • Data is collected in real time and is centralized, accessible, and digestible

If you have a steady, up-to-date flow of data that is kept in one place, accessible to all, and can be easily analyzed — regardless of the file type — you know you’re well on your way to achieving a connected, frictionless planning strategy. By implementing a software solution that enables this kind of data collection process, you can ensure that key stakeholders are all working with the same information. This ultimately minimizes the risk of confusion, conflict, and missteps that affect the bottom line and also allows your employees to connect the dots between historical and real-time data easily.

 

  • Data analysis and decision-making is forward-facing

While historical data is important when calculating a strong statistical baseline forecast, demand planning should also have an eye toward the future, with no one assuming that past behavior dictates future outcomes. Real-time information (weather patterns, for instance, or even possible geo-political events) should be considered when making business decisions.

 

Why would you want a frictionless demand planning strategy?

The better question is: why wouldn’t you? Friction manifests itself in the information that is trapped in silos across your organization or is lost when passing versions of an Excel spreadsheet back and forth. It’s visible when using metrics that aren’t aligned with company goals or when making reactive decisions using out-of-date data. Taking steps to remove that friction from your S&OP processes will streamline your workflows, ultimately resulting in more accurate sales forecasting and providing your employees with enough latitude to make adjustments to inventory levels in real time.

And the need to do this has never been greater. Technological advances and fierce competition are forcing companies across all industries to become more agile in their approach to business.

When ordering items online, for example, consumers are now accustomed to a two-day (or shorter) delivery window due, in part, to Amazon’s masterful data collection, its AI-powered demand sensing capabilities, and its extensive network of warehouses and suppliers. Amazon may have set the precedent, but all companies with an online presence, small and large, are expected to anticipate (!) — not just meet — customer demand and deliver within a short time frame that grows ever shorter.

 

So what’s the best way to remove friction and exceed expectations?

Employ a software solution that takes an agile approach and prioritizes connected planning is key. Look for a tool that can quickly ingest large amounts of data and that helps you sort and analyze the information in a variety of ways (e.g., examine demand at the SKU level, customer level, or both). Then make sure all involved can share and discuss that data with transparency. Empower stakeholders to make timely decisions about inventory or other production-level issues. And encourage them to adjust course when new data suggests a different path.

The John Galt Atlas Planning Suite, designed with the above in mind, has helped many companies eliminate friction in their workflows. Factors Group, for instance, a leading supplier of natural health products, saved approximately 20 man-hours each week on reporting by moving to our centralized data collection platform. And improved communication among stakeholders, facilitated by our collaborative planning capabilities, has even handed the company another major win: aligning its global supply chain with its goal of being lean, green, and environmentally responsible — which, in addition to being extremely admirable, may positively impact customer loyalty.

Check out more of our success stories and explore how Atlas Planning can help eliminate friction in your demand planning processes. This in turn sets your company up for continued success in this highly volatile and rapidly changing business climate.




Tags:     Atlas Planning Suite For Supply Chain Nerds Article S&OP

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