6 Ways Demand Management Leads to Supply Chain Efficiency.

6 Ways Demand Management Leads to Supply Chain Efficiency.

Forecasting the demands of customers and ordering products based on that forecast so that the stock remains filled with the products in demand is what we call Demand Management

Improved Relationship With Customers: Demand Management helps you keep your inventory levels optimized. With accurate demand forecasts, a company’s distribution and logistics stay in proper posture. These two aspects are important pillars of an efficient supply chain.

Improved Relationship with Suppliers: If you have a clear idea about which products will have approximate how much demand, you can plan your raw material purchasing accordingly. This results in zero ambiguity between a company and its suppliers.

Forecasting Demand Trends Leads To Efficient Management of Product Lifecycle: Companies can use this knowledge to launch new products and discontinue products that are predicted to receive reduced demand. Along with that, enhanced predictive analytics will help suppliers, manufacturers and retailers work in sync.

Reduction of Safety Stocks: When you have a clear idea about the future demands, you don’t need to keep excess stocks. You have the visibility and you know exactly when to order a particular product. This helps companies maintain optimum inventory levels with as little cost as possible.

On-time Shipping: On-time shipping depends not just on stock availability but also the availability of enough personnel to handle the shipping process. When you have the ability to predict increase or decrease in demand, you can increase or decrease the number of personnel.

Demand Management Creates a Bridge Between Marketing and Supply Chain: The promotion of any product will obviously increase its demand. So it is necessary to gauge the increase in demand for a product after its promotion. Else, the organisation runs the risk of stockout due to sudden increase in demand. This is also true in case of seasonal increase or decrease in demand.

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