A quality supply chain is the backbone of many companies. But sometimes there can be issues with that chain that can slow down company growth and cause conflict with customers. That can be out of a company’s control when major problems — either natural or man-made — come up suddenly. Fortunately though, with some advance planning, many supply chain problems can be avoided. Among the ways to make a supply chain stronger is demand planning. This is designed to ensure that problems are anticipated and handled before they occur, so the supply chain isn’t disrupted.
What is Demand Planning?
Demand planning is based on planning supply chain requirements around the demand on that supply chain at any given time. For example, a company might start ordering more products in September or October so they don’t run out of products during the Christmas rush. Of course, that will depend on how much warehouse space the company has, how long it takes to get the product, and other factors. Problems such as bad weather can also affect a supply chain, and a company needs to plan for those kinds of issues, as well.
How Can a Problem Be Anticipated?
In some cases, it’s not really possible to anticipate a problem. Things can always go wrong quickly and unexpectedly. But there are many issues that can be spotted before they’re really causing any difficulty for a company or its customers. It’s those kinds of issues that have to be addressed since they’re the ones that companies can do something about. Seeing an increase in demand is important, but anticipating an increase is more valuable. That lets the company ramp up production or request more product before it’s needed, which helps to avoid a shortage.
Companies Need Strong Supply Chains
Having a strong supply chain really matters for companies that sell products. Whether they sell large items like cars or something much smaller, a company needs to make sure its customers can get what they need when they need it. If a company can’t provide that for its customers, those customers will often start going elsewhere for their products. Often, they don’t come back. With that in mind, demand planning can help reduce the risk of losing customers due to a lack of product availability. Customers will have what they need, and the company will keep its customers.
Long-Term Planning Isn’t the Only Focus
While demand planning is sometimes thought of as long-term planning, a lot of it is much shorter in nature. Customer needs and the demand they have for products can change quickly. In some cases, short-term planning is needed to ensure good product movement and happy customers. Considering that issue carefully can be the right way to move planning ahead to the next level and focus on supply chain adjustments as often as necessary. While it may not be easy to always anticipate what customers want — and in what quantities — looking for supply chain issues and responding quickly is a vital part of good demand planning.