Supply chain forecasting opens the door to a wide range of opportunities, as insights into demand and trends can help ensure the right amount of product is reserved, improve relationships with suppliers and avoid unnecessary costs.
However, the speed at which consumer behaviour, markets and supply chains are changing makes forecasting demand a highly complex challenge. That’s why today we’re giving you some tips that you can implement in your day-to-day business to ensure that your goods are delivered on time and to minimise the impact of any supply chain disruptions.
What is Supply Chain Forecasting?
It consists of combining historical supply chain data with insights into current demand to make better decisions for the business – whether it is about inventory levels, transport reservations, budget planning or expansion into new markets.
What are the biggest barriers to supply chain planning?
– Changes in rules between nations and global events. Example: At the time of the COVID-19 pandemic, emergency legislation was applied, resulting in border closures that affected and delayed global trade.
– Changing consumer trends and habits. Example: During the lockdown, online transactions skyrocketed, which meant that many companies had to adapt to avoid product shortages or delivery delays.
– Do not take into account seasonal periods, peak seasons and supplier delivery times.
– Unexpected loss of productivity.
What steps should you take to avoid supply chain disruptions?
1. Have an emergency plan
What happens when the driver has to deviate from the original route?
There are many scenarios that can occur and change the original delivery plans for your freight. This type of contingency can be minimised by planning alternative routes, choosing nearby suppliers and exploring different transport alternatives.
2. End-to-end visibility
Knowing and understanding each stage of the supply chain, from sourcing raw materials through manufacturing to the end customer, is essential for effective planning and for responding efficiently when errors or disruptions occur.
3. Re-align Operations and Distribution of Functions
In the midst of unforeseen events and supply chain disruptions, it is necessary to take action, such as temporarily prioritising internal operations or redirecting teams responsible for distribution centres. Meanwhile, it is important to keep the whole team aware of these adjustments to the company’s operational dynamics.
4. Promoting Open Communication
An open line of communication must be maintained with customers, without withholding information from them. It is important to share with them whether the supply chain has been affected and what is being done to resolve this situation.
5. Assess the Vulnerability of the Supply Chain
Mistakes happen, but there are situations that can be avoided. Therefore, evaluating scenarios and running simulations to predict and identify when and where certain stock surpluses or shortages might occur are the first steps in protecting against future surprises and building a resilient supply chain.
Sources:
Accenture. (2023). Supply chain disruption. Consulted on October 24, 2023, at: https://www.accenture.com/cn-en/insights/consulting/supply-chain-disruption
Maersk. (2023). Supply chain forecasting: How to plan for expected and unexpected disruptions. Consulted on October 23, 2023, at: https://www.maersk.com/logistics-explained/supply-chain-management/2023/09/27/supply-chain-forecasting
Thomas: The Xometry Company. (2023). 7 Strategies To Help You Overcome Supply Chain Disruption. Consulted on October 24, 2023, at: https://blog.thomasnet.com/supply-chain-disruption-strategies
