Having an efficient supply chain management system that responds quickly and smoothly to fluctuations in customer demand is essential if you want your product-oriented business to succeed. Here are four ways to ensure your business stays ahead of the curve.
Use scalable resources
From flexible transportation options that allow you to quickly increase shipping capacity during busy periods to third-party logistics that are able to grow or shrink according to your inventory needs or temporary agencies that allow you to bring in experienced, high-quality employees as and when they are needed. Ensuring all your resources are easily scalable is key to coping with changes in customer demand. Not only will such resources make it far easier to cope when demand is high, but they will also enable you to lower your costs during quieter periods.
Optimise your software solutions
One of the best ways to stay on top of changing customer demand is to use an enterprise resource planning (ERP) system to help optimise inventory levels by predicting customer buying habits and forecasting the necessary stock and purchase requirements. Such a system should take into account historical sales trends, seasonal factors and manufacturer forecasts. You also need to factor in other variables, such as the minimum order required to qualify for shipping or other discounts and limitations on available warehouse space.
You can ensure your customers continue to enjoy the best possible user experience in the face of increasing demand by utilising a SAP-certified business-to-consumer solution such as those from Weaveability. Running directly from your SAP master data, it offers a range of features including full account management, catalogue management, multi-currency and order history for a seamless omni-channel experience.
Beware the bullwhip effect
Failure to properly account for variables throughout the entire supply chain, such as potential delays in manufacturing or shipping, can lead to mismatches along the way which can, in turn, amplify the issues in a phenomenon known as the bullwhip effect.
Overreacting to backlogs, poor communication and coordination between departments, fluctuations in prices, product promotions or simply forecasting errors can all contribute to the bullwhip effect and can prove extremely costly to your business. You can reduce issues from the bullwhip effect by ensuring that your product demand information is as close to real-time as possible, by having a consistent pricing structure in place to avoid sudden surges and improving customer service so that order cancellations are kept to an absolute minimum.
Trust your intuition
Once you have been running your business for a while, you may start to get intuitive feelings about factors that might affect customer demand that statistical software does not take into account. This is especially the case if your products are sold to a specific industry or cover a particular local area. Changes in the weather or other economic variables such as the opening of a rival firm, could all impact your business.
In such cases, you might even find yourself making decisions that contradict what the numbers are telling you. Having the courage to follow your intuition can be the mark of a great business leader, but for the best results, use it in combination with analytics, data and customer feedback.