How to Better Manage Demand Volatility

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In the last decade, the manufacturing industry has been dealing with the rising impact of demand volatility.  As its name suggests, demand volatility is defined as variations in demand for products that include rapidly changing and unpredictable market.  There are many reasons why demand volatility has grown, which mostly comes down to changing consumer expectations.  Consumers have come to expect companies to provide a wider variety of products, readily available for purchase and at the best price. 

Over the past year and a half, the COVID-19 pandemic has highlighted the effects an uncontrollable and unpredictable world event has on product demand.  Companies that produce cleaning supplies and disinfectants felt the strains of high demand, while others were left with excess inventory as markets for non-essential items plummeted.  Now that the world is starting to settle into its new standard, consumer demand will continue to increase, with spending on goods already increasing by 25.6% in the first quarter of 2021.  While supply chains have experienced significant disruption over the past 15 months, consumer expectations have not changed. Instead, product shortages, stockouts, and demand surges caused by the pandemic widened the gap between consumer expectations and outcomes. 

These disruptions are harsh reminders that manufacturing organizations must be agile and quickly adapt to changing market conditions.  When demand is not met, organizations risk losing their competitive advantage and may see a loss in future sales. 

Here are some benefits of modern supply chain solutions that help manage demand volatility. 

Scenario Planning 

Scenario planning allows organizations to assess the effects of various changes in the supply chain without causing any disruptions.  When done with a modern, AI-based foundation, companies can prepare for unknown situations.  Scenarios model how changes in inventory level or product schedule affect various key performance indicators.  Then, armed with better intelligence, organizations swiftly adapt to changing conditions.  Vanguard Predictive Planning™ offers complete support for unlimited what-if scenarios that are saved and shared across the platform. 

Accurate Forecasting 

Ideally, manufacturers should be able to accurately predict consumer demand instead of scrabbling to respond to it.  However accurate, applying a demand forecasting model can be difficult when dealing with rapidly changing and unpredictable markets.  Modern solutions, such as Vanguard, use AI and machine learning to understand patterns and correlations in data sets that planners may miss.  Vanguard Predictive Planning’s™ AI-based modeling can automatically determine and apply the most accurate forecasting method for each product. 

Scalable Planning 

Another benefit that helps manage demand volatility is to adjust and scale the planning process.  By shortening the time required to build and agree on supply chain plans, companies can make strategic decisions based on new data, distribute forecasts immediately, and apply them to every level of product granularity.  With disruptions that can arise each day, it is helpful to shorten the span of the planning process to update production more frequently.  Vanguard is the most flexible and scalable supply chain platform option on the market. 

Once such Vanguard customer, Fountain Tire, was able to push portfolio-wide forecast adjustments to the most granular level overnight once COVID-19 hit.  Adjustments that once took several weeks to push to the item region level were accomplished virtually in real-time using Vanguard. 


Having high visibility in the supply chain is crucial.  With a modern solution, planners can set alerts to identify when inventory levels are getting too low to ensure more of those SKUs are produced or supplied in time to meet demand.  With Vanguard’s Collaboration Hub ™, alerts are shared across the platform to colleagues inside and outside the organization to suppliers or distributors. 

Vanguard Predictive Planning™ is a modern solution that quickly enables planners to adapt to their industry’s volatile demand environment.  Meeting customer demand ensures the company’s wellbeing and increases sales while lowering costs and lead times to satisfy those demands. 

Want to learn more about Vanguard Predictive Planning?  Register for our upcoming webinar that will demo how Vanguard’s unified suite of demand, supply, and sales planning solutions save you time, improve operations, and leave you better prepared to mitigate supply chain disruption.