How Demand Management Enables Supply Chain Resiliency

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In the new normal of supply chain disruptions, it has never been more important for planners to strategically manage disruptive events, which create dramatic spikes or dips in demand, shortages in parts or supplies, and unexpected changes in shipping schedules. Moreover, successfully operating a supply chain today requires collaboration across the entire organization.  Stakeholders in manufacturing, logistics, transportation, supplier management, marketing, human resources, and finance all play critical roles in both stable and disruptive times. 

While a period of continued disruption may seem like the wrong time to adopt a new supply chain model, recent global events serve as a call to action – shining a light on the need for collaborative, end-to-end solutions for business planning. In addition, 2020 illuminated the poor outcomes resulting from history-based forecasting, which relied too heavily on pure statistics and did not consider enough market insights and additional data sources. 

Modern Solutions Enable Shock-Resistant Supply Chains 

There has been a decades-long focus on supply chain optimization, emphasizing minimizing costs, reducing inventories, and driving up asset utilization, which has removed buffers and the flexibility to absorb disruptions.  When systematic shock hits, organizations become painfully aware of the vulnerability of their supply chain to global disruptions. 

New supply chain solutions, like Vanguard Predictive Planning™, improve visibility across the end-to-end supply chain and support mitigating such disruptive events.  Digital supply chain solutions break down functional silos, and organizations gain end-to-end visibility, collaboration, agility, and optimization throughout every aspect of their supply chain management. 

Organizations that deploy modern supply chain solutions are better prepared to deal with any number of unexpected events, be it a pandemic, trade dispute, sudden spike in demand, or supplier instability. 

For example, Fountain Tire uses Vanguard Predictive Planning™ to receive alerts on order suggestions and potential stock-outs.  When COVID-19 caused widescale changes in product demand, Fountain Tire adjusted sales expectations and began ordering products based on these expectations frequently and rapidly. 

“When COVID hit, we were able to push portfolio-wide forecast adjustments to the most granular level overnight; adjustments that once took several weeks to push down to the item region level, we were able to accomplish virtually real-time, so that everyone from the leadership team driving the business to the inventory analysts placing orders were all driving on the same road and executing together.” 

-Ken Miller, Director of Inventory, Fountain Tire 

Connected Planning Drives Demand Management and Supply Chain Resiliency 

Organizations that deploy a modern supply chain solution for a connected supply chain planning approach eliminate siloed planning and increase decision-making accuracy. 

  • Breaking down silos:  By consolidating siloed planning into one unified platform, organizations can execute tasks more quickly, freeing up planners’ time for value-added activities.  Additionally, increased visibility allows decision-makers to unblock more value across the organization. 
  • Accurate decision making:  A connected planning approach provided fast access to meaningful data.  With the power of AI and machine learning, it is possible to discover trends and patterns in a quickly changing world.  Better visibility and immediate consumption of large data sets also give organizations more time to make strategic decisions when reacting to changes in a constantly evolving environment. 

When adapting to a new supply chain model, businesses should first focus on their most pressing challenge.  Once identified and addressed, connected planning enables risk assessment across the entire supply chain, evaluating portfolios to understand any weaknesses. Then, armed with this clear picture, key stakeholders confidently make critical supply chain decisions in a time of increased volatility to protect revenue, margin, and cash flow by integrating supply chain, finance, and commercial decisions. 

It is easy to see that traditional demand planning and history-based statistical modeling deliver diminishing value.  Today’s business landscape requires a new approach to forecasting.  But for that to happen, organizations must plan and integrate market intelligence, advanced algorithms, and internal and external collaboration across multiple aspects of their supply chain process. 

Companies address business imperatives by taking a unified supply chain planning approach to increase demand forecast accuracy.  It boosts confidence in top-line revenue projections, material purchase requirements, operating expenses, and capital investments.  End-to-end demand management – that incorporates commercial and financial decisions – delivers supply chain resiliency.  Connecting supply chain and financial decisions in a single platform enable organizations to master market volatility by acting collaboratively, developing plans for multiple scenarios, and responding swiftly and confidently. 

To learn more about Vanguard Predictive Planning™, request a demo today