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How to Protect Service Levels in a Pandemic
Scared of losing service to your customers because of a supplier? Worse yet, because of a supplier during a pandemic? Supplier constraints even on a normal day can wreak havoc on service. Throw COVID-19 into the mix, and it becomes an official crapshoot.
If you feel like keeping your customers happy at a time like now is impossible, you’re not alone. Today we’ll look at some strategic ways to manage the uncertainty and how to protect service levels, even in a pandemic.
Upstream Collaboration: Order Projections
In general, you can get in front of supplier limitations by passing along your projections upstream.
A forecast management system that delivers nightly updated projections can provide invaluable information to the supplier. Many cloud-native demand forecasting solutions like Blue Ridge have a collaboration component built in.
This upstream visibility allows suppliers to adjust their production planning to meet the unique service needs of your business. In turn, you can pivot quickly to serve downstream customers, better and smarter.
Demand Deviation Alerts
Now, what happens if demand changes overnight due to a pandemic such as COVID-19? If demand deviates from your current order projections, your solution should recognize this behavior as demand high/demand low and automatically revise the projections.
Giving suppliers visibility into your revised projections allows them to react as quickly as possible. The system looks at the revised projections, considering supplier constraints, and suggests economically optimized replenishment orders. Analysis happens nightly, so you can easily adapt to whatever is going on in the market. Pandemics, hurricanes, political drama, tariffs, whatever comes your way.
Now, Let’s Scale That
Now, you might be thinking this can all be done manually. And… maybe you’re right… if we are talking about one item from one supplier.
- How would your current forecast management process stack up against thousands of SKUs in various locations with 500 suppliers contributing to the portfolio?
- How would managing this scenario and updating the projections look today?
- Does your team have the time or human computational power to consider all the supplier constraints such as minimum order quantities, buying multiples, scheduled buys, production limitations, etc.?
That’s the due diligence it would take to protect service levels and your bottom line. We didn’t even mention analysis of demand behavior by location, on-hand inventory, carrying and acquisition costs, and lead times for each unique item! Yes, that is a lot to take in…
In times like these, the best answer is a forecast management solution that will do the tactical heavy lifting for you. Accurate order projections are a must, but they are not enough without action.
Automated Forecast Management
The ability to get alerted of demand deviations, communicate order projections upstream and economically order around supplier constraints will give you the best chance at protecting service.
With customer demand literally changing by the hour, there’s really no choice. You NEED a system that can react on a dime.
Whether you have an advanced forecast management system or not, almost all industries need an efficient way to anticipate ALL factors behind their service levels and their bottom line… from un-forecastable lead times and supplier capacity to costs from overseas suppliers, commodity cost fluctuations and much more.
If you find yourself having any questions after reading this article, use this link to schedule 15 minutes with me. I can help you prepare for the next inevitable disruption in service.
Stay safe and stay healthy!
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