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Last updated on 2024年11月22日

How do you handle demand fluctuations due to external events or disruptions?

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Demand fluctuations due to external events or disruptions can pose significant challenges for production engineers. They can affect the availability of raw materials, the capacity of production facilities, the delivery of finished products, and the satisfaction of customers. How can you handle these fluctuations and ensure optimal production performance? In this article, we will discuss some strategies and best practices for demand forecasting and inventory management in the context of production engineering.

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Khant Min Tun

Mechanical Engineer - Manufacturing and Maintenance
Anthony Luiz

Engenheiro de Produ??o | Analista de Opera??es | Analista de Logística | Analista de Planejamento
Asanka Chathuranga MBA, BSc.(Eng.), CLSSBB

Regional Continuous Improvement Manager | Breakthrough results in 04 manufacturing pilot sites, 09 global deployments…

1 Understand the sources of demand fluctuations

The first step to handle demand fluctuations is to understand the sources and patterns of demand variability. Demand fluctuations can be caused by various factors, such as seasonality, promotions, trends, competitors, weather, natural disasters, pandemics, political instability, or supply chain disruptions. Some of these factors are predictable and can be incorporated into demand planning models, while others are unpredictable and require more flexibility and responsiveness. You should analyze historical data, market research, customer feedback, and industry news to identify the sources of demand fluctuations and their impact on your production processes.

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Khant Min Tun

Mechanical Engineer - Manufacturing and Maintenance
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1. Scenario Planning: Prepare for disruptions by forecasting various scenarios based on historical data. 2. Agile Inventory Management: Keep flexible inventory levels that can be quickly adjusted and use just-in-time practices to reduce excess stock. 3. Supply Chain Diversification: Build relationships with multiple suppliers for risk reduction. 4. Flexible Workforce: Utilize temporary staffing and cross-train employees. 5. Real-Time Data: Monitor market trends for better forecasting. By implementing these strategies, businesses can effectively navigate demand changes and maintain efficiency.

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Anthony Luiz

Engenheiro de Produ??o | Analista de Opera??es | Analista de Logística | Analista de Planejamento
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Planejamento adaptativo: Uso ferramentas como MRP e CRP para ajustar capacidade e prever cenários. Gest?o de estoques: Estoques de seguran?a e estratégias como Just-in-Case garantem disponibilidade com controle de custos. Flexibilidade operacional: Implemento produ??o sob encomenda e estratégias de adiamento para alinhar oferta e demanda. Tecnologia e análise de dados: Big Data e Machine Learning ajudam a prever tendências e ajustar opera??es rapidamente. Planos de contingência: Estruturo BCPs para mitigar impactos e garantir continuidade.

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2 Use appropriate demand forecasting methods

The second step to handle demand fluctuations is to use appropriate demand forecasting methods that suit your production context and goals. Demand forecasting is the process of estimating the future demand for your products based on past data, current trends, and future scenarios. There are different types of demand forecasting methods, such as qualitative, quantitative, causal, and simulation methods. You should choose the method that best fits your data availability, accuracy requirements, time horizon, and complexity level. You should also update your demand forecasts regularly and monitor their accuracy and reliability.

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Lucas Bretz

?? Helping your company to reach its full production potential | Growing sustainably with improved processes | General Manager | Co-Founder | Dr.-Ing. | Karlsruhe (DE) & Suzhou (CN)
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AI-driven solutions like Blue Yonder enhance demand planning by integrating real-time data, which allows supply planning teams to optimize production and respond flexibly to market changes by having concise, weekly forecasts available. With AI's forecasting and replenishment capabilities, businesses have improved forecast accuracy by 15%, reduced out-of-stock situations, and decreased inventory. Advanced analytics, such as heuristics and machine learning, support decision-making and intelligent planning. For example, Oriflame reduced inventory levels by 25% using Blue Yonder's AI-based demand and fulfillment solutions.

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3 Implement inventory management techniques

The third step to handle demand fluctuations is to implement inventory management techniques that balance the trade-off between inventory costs and service levels. Inventory management is the process of controlling the quantity, location, and quality of your inventory throughout the production cycle. There are different types of inventory management techniques, such as economic order quantity, reorder point, safety stock, ABC analysis, and inventory optimization. You should choose the technique that best matches your inventory characteristics, demand variability, lead time, and customer expectations. You should also track your inventory levels and performance indicators, such as inventory turnover, fill rate, and stockout rate.

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4 Adopt agile and resilient production systems

The fourth step to handle demand fluctuations is to adopt agile and resilient production systems that can adapt to changing demand conditions and recover from disruptions. Agile production systems are those that can respond quickly and efficiently to customer needs and market opportunities. Resilient production systems are those that can withstand and overcome adverse events and shocks. You can enhance the agility and resilience of your production systems by using techniques such as lean manufacturing, flexible manufacturing, modular production, automation, digitalization, and collaboration.

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Lucas Bretz

?? Helping your company to reach its full production potential | Growing sustainably with improved processes | General Manager | Co-Founder | Dr.-Ing. | Karlsruhe (DE) & Suzhou (CN)
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We derived technical measures for optimal changeability in assembly systems (Scalable Automation), verified with a high-pressure valve manufacturer for fuel cells. The methodology consists of four steps: 1) Quantify volatility and uncertainty based on change drivers affecting key performance indicators. 2) Develop the technical solution space for possible system configurations. 3) Formulate and solve a Markov decision problem to determine a scaling strategy, which involves modeling different states of the assembly system and the transitions between them, considering probabilities and costs to find the optimal path for scalability. 4) Analyze the scaling strategy to derive construction guidelines for specific technical change enablers.

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5 Communicate and coordinate with stakeholders

The fifth step to handle demand fluctuations is to communicate and coordinate with stakeholders across the production value chain. Stakeholders include suppliers, customers, distributors, employees, managers, and regulators. You should establish clear and frequent communication channels with your stakeholders to share information, expectations, feedback, and solutions. You should also coordinate your production activities and decisions with your stakeholders to align your goals, plans, and actions. You should foster trust, transparency, and teamwork among your stakeholders to achieve mutual benefits and satisfaction.

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6 Learn and improve from experience

The sixth step to handle demand fluctuations is to learn and improve from your experience and feedback. You should evaluate your production performance and outcomes against your objectives and standards. You should identify your strengths, weaknesses, opportunities, and threats. You should collect and analyze data, metrics, and feedback from your production processes and stakeholders. You should apply lessons learned, best practices, and continuous improvement methods to your production systems and strategies. You should also monitor the external environment and anticipate future changes and challenges.

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7 Here’s what else to consider

This is a space to share examples, stories, or insights that don’t fit into any of the previous sections. What else would you like to add?

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Asanka Chathuranga MBA, BSc.(Eng.), CLSSBB

Regional Continuous Improvement Manager | Breakthrough results in 04 manufacturing pilot sites, 09 global deployments in 2+ years | Bottom-line savings $1.4 million, 58 Lean Six Sigma projects | IWS RTT | WCM | Quality
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For demand high scenario, build optimized inventory buffers. Use Scenario planning in those decisions of specific numbers. Utilize QCO/SMED for production agility to ramp up outputs rapidly. Increase cycle times if needed within limits. Align closely with all stakeholders to balance priorities. Focus on reducing production losses & improve productivity through daily management systems & daily direction setting. For demand low scenario, utilize flexible contract labor and outsourcing to adjust workforce. Complete orders efficiently through load sequencing then idle plants to save costs. Vigilantly monitor global forecasts and supply chain visibility to anticipate and synchronize demand shifts proactively.

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Lucas Bretz

?? Helping your company to reach its full production potential | Growing sustainably with improved processes | General Manager | Co-Founder | Dr.-Ing. | Karlsruhe (DE) & Suzhou (CN)
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To achieve optimal scalability in assembly systems, various mechanisms can be implemented: 1) Intra-station Scaling: Scalable Automation: Adjust automation levels within a station. Station Division: Split a station into smaller units for flexibility. Reconfiguration: Modify the station layout to adapt to new needs. 2) Inter-station Scaling: Bottleneck Duplication: Duplicate bottleneck stations to alleviate constraints. Line Duplication: Replicate entire production lines to increase capacity. 3) Organizational Scaling: Number of Employees: Adjust workforce size to match production needs. Shift Model: Implement various shift models to optimize productivity. These mechanisms enable assembly systems to efficiently adapt to changing demands.

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How do you handle demand fluctuations due to external events or disruptions?

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1 Understand the sources of demand fluctuations

2 Use appropriate demand forecasting methods

3 Implement inventory management techniques

4 Adopt agile and resilient production systems

5 Communicate and coordinate with stakeholders

6 Learn and improve from experience

7 Here’s what else to consider

Production Engineering

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