Continuous and rapid change demands a dynamic supply chain. Today’s retailers and consumer packaged goods (CPGs) companies must overcome increasing digitalization, new challengers, and the pandemic. Digital channels and multiple delivery modes are now pervasive, new entrants have retrained consumers to expect on-demand access, and the pandemic has accelerated these trends.
Customer expectations for instant gratification has changed the game. Customers want the latest products on-demand, and through their choice of delivery channel. Supply chains are challenged to have the right product in the right place at the right time, and at a competitive price. Meeting these challenges requires accurate forecast and demand planning that is dynamic.
How can you bridge the gap between lead times and consumer expectations? A brute force approach of stockpiling inventory at multiple distribution locations while increasing transport capacity is cost prohibitive and generates waste. But there is a better way. To balance the rapidly changing demands of today’s seemingly unpredictable customers while driving profitable growth, companies need to continuously forward-balance inventory to deliver excellent service to improve customer experiences, enable cost excellence to maintain profitability, and improve sustainability to lower carbon footprints.
Predictions of what customers will buy based on simple drivers, such as seasonality and previous purchasing habits, are too slow moving. They cannot meet the needs of modern retailers and CPGs. Today’s complex environment requires additional drivers, including channel, mode of delivery, social media endorsements, COVID-19 impact, and more. And it must all be dynamic. It’s a shift from simple forecasts and demand plans to an agile supply chain that is continuously optimized based on real-time data insights.