Tips for Successful Supply Uncertainty Planning
The following transcript was created using a combination of automated and human transcription. Please check the audio version before quoting from the transcript.
Mary Vasile: Hi, everyone. Welcome to 3 Minutes in the Loop the bite- sized video series, where you can stock up on the latest supply chain insights, strategies, and news, in the time it takes to get your caffeine fix. I’m your host, Mary Vasile, and today we’re covering tips for successful supply uncertainty planning. Our special guest is Bobby Miller, Director of Customer Success at ToolsGroup. Bobby, welcome to 3 Minutes in the Loop.
Bobby Miller: Glad to be here, Mary.
Mary Vasile: And we’re glad to have you. So, as we begin the new year, protracted supply constraints continue to be a challenge for supply chains. What advice do you have for companies that need to plan for uncertainty while maintaining service to customers?
Bobby Miller: Well, the first thing on companies minds now is to get through this current phase of clogged supply caused by the massive Bullwhip effect of COVID. Our manufacturing, distribution, and retail customers are using innovative planning methods to do this. I’ll give you a few examples of what’s working.
Bobby Miller: Making the best use of available inventory. Allocate the stock you have on hand according to your business goals, (profitability or sales maximization, or other methods). Using demand shaping methods like promotions and price optimization to shift demand to available products.
Bobby Miller: Thirdly, rationalizing product portfolio. Identify the products that are surging in demand versus dwindling. Determine the strategic value of each product in your portfolio. Assess potential opportunities to collaborate with business partners, to bring new products to market. Companies using planning methods like these can keep product availability higher than their competitors.
Mary Vasile: Yes, and we’ve certainly seen that using innovative planning is called for nowadays. And now experts are saying that we should be seeing some relief from supply delays midway through 2022. So, what does that mean for companies now?
Bobby Miller: Ah, exactly, Mary. The biggest thing is to recognize that the supply delays we are experiencing now won’t last forever. That means companies need to be thinking ahead to what’s coming next, and preparing to handle much faster paced forecasting and inventory planning required in this new normal state that we’re in.
Bobby Miller: Last year in a study we conducted with CSCMP, we found that 32% of companies were handling volatile demand and slow moving inventory poorly, or even very poorly. Not surprisingly, 42% of companies accelerated their plans to digitize supply chain planning because of COVID. They want to be ready for the next wave coming in 2022 as the supply chain recovers.
Mary Vasile: So then what types of technologies are those companies evaluating?
Bobby Miller: Well, our research shows that 60% of the companies have a project underway or plan to implement some type of demand forecasting, inventory optimization or replenishment solution. The most agile and resilient supply chains have the technology to keep up with customer behaviors, but most importantly, to maintain high service levels despite the uncertainty.
Mary Vasile: Well, thank you very much for providing those insights for our viewers: use of innovating planning methods for today, and investing in digital planning to be ready for the new normal coming soon. Thank you so much for joining us today, Bobby.
Bobby Miller: Glad to do it.
Mary Vasile: And thank you for watching. Now, you’re in the loop. See you next time.