Well here we are, into the second week of 2016. Christmas but a memory already and those New Year resolutions you swore you’d stick to look like a worse idea each day…
It’s also the time when some will need to start looking at how they’re going to manage this year’s Christmas period in their business, especially those involved in consumer goods which see a surge in demand as we hit the last quarter. Perhaps it went so badly in 2015 that it’s more a post mortem than a forward planning discussion!
Some, of course, will also be looking at other periods which will see demand uplifts: you may already be wondering how you’re going to manage the increased summer demand in your ice cream company, or the Easter uplift for your chocolate business.
Whether you’re looking at the long-term sales forecast and thinking “this doesn’t look too bad, we can handle it!”, or perhaps “if the sales guys have this right we’re in big trouble!”, there’s always uncertainty around whether the forecast is reliable enough to generate your medium/long-term supply plan from when it comes to this type of activity.
Indeed even once you have a forecast you think you can run with, and some idea of how the seasonal events will play out, there is still the question of how to actually get it all into an achievable plan and then of managing that plan.
Perhaps your S&OP process will focus on getting the demand uplift in place, work something out in terms of RCCP and then let the supply plan follow naturally? Or perhaps you’ll try to firm up the supply plan much sooner?
If you’re using the forecast to drive the replenishment process itself (not just for inventory planning) then you’re probably already expecting to spend more time expediting and de-expediting as the uplift approaches – after all, the bigger the forecasted increase, the bigger the change when it doesn’t happen exactly when you expected.
If you’re using a more demand-driven method to plan the replenishments, and won’t need to rely so much on the accuracy of the ‘when’ to manage the short-term plan as the event period arrives, how are you going to make sure the inventory plan can cope with the uplift when it arrives?
I’m sure there are loads of different tactics in use, from pure guess work to much more structured approaches. I know our clients all face different challenges in their businesses around events/promotions and so there are many approaches being used to cope with everything from shelf-life restrictions to huge component leadtimes. Not forgetting that supplier holiday shutdown, just when you didn't need it...
So, rather than me saying “ I think you should be doing XYZ" I’m interested to hear how you’re really planning for your next big event/promotion and what you think will be the biggest challenge(s) when “the day of reckoning” arrives (again…)