The hallmarks of today’s supply chain are volatility, change, and fluctuations. Consumer preferences shift on a dime, the economy swings wildly, and global challenges can lead to unexpected shortages and delays. To thrive in this unpredictable environment, inventory-based businesses can create responsive supply chains that adjust and react in real time. This is known as demand re-mapping, and it can be a lifeline for businesses in the supply chain. Instead of struggling to keep up with the ever-changing demands of the market, businesses can incorporate real-time insights and data to be more agile and adapt to sudden shifts in demand.
Here’s everything you need to know about demand re-mapping for responsive supply chains, including best practices for implementing it in your business.
What is Demand Re-Mapping?
The supply chain is anything but stagnant, and in recent years, we’ve seen just how quickly and severely things can change. We’ve also seen how events that impact the supply chain can have a ripple effect for years to come. For example, during the coronavirus pandemic and the two years following, annual supply chain disruptions skyrocketed, from around 3,000 to more than 11,600. When supply chain disruptions occur, data shows that businesses face increased costs, loss of revenue, and loss of productivity (among other things).
What is the answer for weathering this uncertainty and volatility? Demand re-mapping for responsive supply chains, which involves using real-time data and insights to create dynamic and responsive operations and processes.
Here’s how demand re-mapping works.
- Continuous revision: Unlike static processes, demand re-mapping for responsive supply chains is continuous. New data is constantly incorporated into forecasts, allowing ordering to be adjusted and refined as conditions change.
- Real-time data sources: Demand re-mapping goes beyond historical sales figures and taps into a rich stream of real-time data. This might include sales data and external market data (such as economic trends).
- Advanced algorithms: Demand re-mapping relies heavily on advanced algorithms, which provide you with accurate demand forecasts. These algorithms let you pick bottom-up, top-down, or middle-out forecasting models and can take unexpected promotions, new clients, and even natural disasters into account.
Ultimately, demand-remapping creates responsive supply chains, which are prepared to adapt and thrive in a fast-paced market.
Benefits of Demand Re-Mapping
Traditional forecasting and decision-making approaches can lead to static businesses, which need to play catch up to market and consumer changes. Demand re-mapping, however, supports responsive supply chains, and empowers supply chain businesses to take control of their inventory and ordering, even in the face of changing conditions.
Here are some of the possible benefits of demand re-mapping:
1. Improved forecast accuracy
Demand re-mapping continuously adjusts forecasts based on real-time data and unexpected events, which can lead to a higher level of ordering accuracy. This allows for better planning and decision-making across the entire business.
2. Reduced inventory holding costs
Inaccurate demand forecasts can result in costly ordering mistakes – either too much stock sitting idle on shelves (leading to excess holding costs), or stockouts (which can lead to missed revenue opportunities). With demand re-mapping, businesses can optimize inventory levels. This minimizes the risks of overstock and stockouts, potentially leading to significant cost savings in warehousing and storage.
3. Enhanced customer satisfaction
Accurate ordering is crucial for earning and maintaining customer satisfaction. Demand re-mapping helps ensure you have the right products in stock at the right time. This can translate to happier customers who can order what they need when they need it, fostering loyalty and repeat business. Keep in mind that data shows that unavailable products can lead to frustrated customers and lost sales.
4. Increased agility
The supply chain ecosystem is constantly evolving. Ongoing demand re-mapping allows your business to become more agile and adaptable. By identifying trends and shifts in demand early on, companies can quickly adjust production schedules, resource allocation, ordering habits, supplier needs, and promotions to capitalize on new opportunities. This agility can help build resilience, and give businesses a significant competitive edge in today’s dynamic market.
How to Implement Demand Re-Mapping
If you’re interested in implementing demand re-mapping to create responsive supply chains, here’s a roadmap to get you started:
1. Leverage real-time data sources
The foundation of demand re-mapping lies in the data you use. Identify and integrate real-time data sources relevant to your inventory-based business, and use this data to inform your demand forecasts. Your data sources should also include unexpected events, such as promotions, new clients, and natural disasters.
2. Utilize advanced forecasting tools & algorithms
Advanced inventory forecasting and analytics tools are essential for implementing demand re-mapping. Invest is supply chain planning tools which include forecasting and analytics features. These tools can analyze vast amounts of data, and use cutting-edge algorithms to generate accurate forecasts.
3. Collaborate with your suppliers
Your suppliers play a big role in your business’s ability to adapt in real time. Because of this, it’s crucial to keep track of supplier performance and develop excellent working relationships with suppliers. This allows you to communicate real-time needs, and for you to work collaboratively with your suppliers to adjust to changes in ordering.
Also, keep in mind that when you use supply chain planning tools, they typically include features for monitoring supplier performance. For example, you can view lead times to make precise plans, and create daily order schedules for each item, to ensure your supply chain runs smoothly.
4. Improve processes across departments
Demand re-mapping isn’t a siloed operation in your organization. Instead, it requires a collaborative effort across different departments. With this in mind, it’s important to improve collaboration and processes across all departments in your organization.
For example:
- Sales: Sales teams can provide valuable insights into customer behavior and upcoming promotions, which might influence buying habits and demand.
- Marketing: Marketing teams can share data on campaign performance and anticipated impacts on demand.
- Operations: Operations can provide insights into production capacity and lead times, ensuring forecasts are accurately realized.
To improve collaboration across departments, look for ways to improve communication and data-sharing. Establish designated channels for sharing demand data and forecasts, for example, to ensure everyone is on the same page. If you use a supply chain planning suite, ensure all stakeholders are well-trained and know how to access relevant information.
5. Continuously monitor and adjust
Establishing effective demand re-mapping processes and systems will require you to monitor your efforts and adjust them as needed. Establish metrics and key performance indicators (KPIs) to measure the effectiveness of your efforts. For example, you could monitor forecast accuracy, inventory turnover, and customer satisfaction metrics.
Also, be sure to stay informed about market trends, consumer preferences, and economic indicators, which could impact demand for your products or services. Regularly analyze this information to anticipate changes in demand, and keep an even more watchful eye on your forecasts and ordering.
The modern supply chain, which is ever-changing and fast-moving, requires modern business solutions. For that, we can turn to demand re-mapping, which can create responsive supply chains and organizations, ready to adapt to real-time needs.
Leverage Demand Re-Mapping with StockIQ
Demand re-mapping can be a game-changer for inventory-based businesses, but to properly deploy it in your organization, you need the data and infrastructure to inform your decisions. For that, you can trust StockIQ.
StockIQ is a supply chain planning suite that allows you to control inventory, simplify ordering, and improve forecasting. With StockIQ’s user-friendly interface, you’ll have access to the data and insights you need to adapt nimbly and respond to the modern market.
Contact us today to get started with StockIQ.
