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How do you manage demand in multiple locations?

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Managing demand in multiple locations is a challenging task for any business that wants to optimize its resources, satisfy its customers, and avoid overstocking or understocking. It requires a strategic approach that combines data analysis, forecasting methods, and coordination across different sites. In this article, you will learn some tips and best practices to help you plan and manage your capacity across multiple locations.

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Sanjay Saini

Chief Supply Chain Officer (CSCO) | Executive Management Board Member | P&L Management | End-to-End Supply Chain |…
Floyd Angcanan

Supply Chain Project Leader | Project Deployment, Operational Planning

1 Understand your demand patterns

The first step to manage demand in multiple locations is to understand how your demand varies by time, location, product, and customer segment. You need to collect and analyze data from your sales history, market trends, seasonality, promotions, and customer feedback. You can use tools like spreadsheets, dashboards, or software to visualize and interpret your data. By understanding your demand patterns, you can identify the drivers and sources of demand, the similarities and differences between locations, and the potential risks and opportunities.

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2 Forecast your demand

The next step is to forecast your future demand based on your historical data, current conditions, and expected changes. You can use different forecasting methods, such as qualitative, quantitative, or hybrid, depending on the availability and accuracy of your data, the complexity and uncertainty of your demand, and the time horizon of your planning. You should also consider the factors that can affect your demand, such as competition, customer behavior, economic situation, weather, or events. By forecasting your demand, you can anticipate the level and timing of demand, the fluctuations and trends, and the gaps and deviations from your targets.

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Sanjay Saini

Chief Supply Chain Officer (CSCO) | Executive Management Board Member | P&L Management | End-to-End Supply Chain | Manufacturing Operations | Planning | Transformational Leadership | Digital Supply Chain | Growing Talent
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While managing demand, there is no one answer whether it should be centralized or decentralized. It depends on the business - customer expectation, service, lead time, cost, driven by organization's reliability, agility and flexibility. A holistic network study may be a good starting point. If you must have multiple nodes in your network then you must consider - demand and supply variability, lead time, and service expectation to define your inventory norms at each node. It is advisable to have some central DC to manage and serve the downstream DCs to optimize the inventory and flow.

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Floyd Angcanan

Supply Chain Project Leader | Project Deployment, Operational Planning
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Managing demand in multiple locations can be challenging. Here are some strategies: 1. Demand forecasting: Implement a robust demand forecasting system that takes into account historical data, market trends, and customer insights. 2. Centralized demand planning 3. Regional customization: While centralizing demand planning, allow for regional customization. 4. Supply chain visibility 5. Inventory optimization 6. Collaboration and communication: Foster collaboration and open communication channels between different locations. Encourage regular sharing of demand insights, best practices, and challenges faced. 7. Agility and flexibility: Build flexibility into your supply chain to accommodate fluctuations in demand.

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Alex Satinsky
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Forecasting demand requires communication, with sales & with your customers (& others), & understanding historic demand. Past forecast accuracy & bias are also critical to understand to help fine tune the forecasting methodology & process at both the SKU & aggregated levels AND by location & product line. At a high level, I see forecast in 4 quadrants. The easiest is the Known Knowns. Your sales history & customer forecast are examples. Then you have your Known Unknowns - these can be weather related, e.g. hurricane season. You know it's going to happened, just not when & where, but it can be planned for. The last 2 are your Unknown Knowns (I should have thought of that) & your Unknown Unknowns (e.g. the Suez Canal blockage).

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3 Align your capacity

The third step is to align your capacity with your forecasted demand across multiple locations. You need to determine how much capacity you have, how much you need, and how to balance them. Capacity is the maximum amount of output or service that you can produce or deliver with your available resources, such as staff, equipment, space, or inventory. You can use metrics like utilization rate, efficiency rate, or service level to measure and monitor your capacity. By aligning your capacity, you can match your supply and demand, optimize your resource allocation, and improve your performance and profitability.

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Brigadier Inder Sethi

Transforming Business Battlefields | Military Leadership + AI + Deeptech | Futures Thinking Coach | Creator of Vuja De? Framework | Your Strategic Ally - Helping You See The Unseen
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In this VUCA world, the answer lies in Demand Sensing by Using real-time data, like IoT, for accurate short-term demand views and clubbing it with Dynamic Forecasting, employing AI for real-time demand predictions. This can be enhanced with Geo-Analytics to understand location-specific demand influencers. All this in place, frequent Scenario Planning can help prepare for unexpected events with multiple demand scenarios.

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4 Adjust your capacity

The fourth step is to adjust your capacity according to the changes in demand or supply across multiple locations. You need to track and evaluate your actual demand and capacity against your forecast and plan, and identify any discrepancies or issues. You can use tools like control charts, variance analysis, or feedback loops to detect and analyze the causes and effects of the deviations. By adjusting your capacity, you can respond to the variations and uncertainties in demand or supply, correct any errors or inefficiencies, and enhance your flexibility and resilience.

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5 Coordinate your capacity

The final step is to coordinate your capacity across multiple locations to ensure consistency and harmony. You need to communicate and collaborate with your stakeholders, such as managers, staff, suppliers, or customers, across different sites. You can use tools like meetings, reports, or software to share and exchange information, goals, and expectations. You also need to establish and follow some rules and standards, such as policies, procedures, or agreements, to align and integrate your activities and decisions. By coordinating your capacity, you can create synergy and value, avoid conflicts and duplication, and achieve your objectives and outcomes.

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6 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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Alex Satinsky
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The are a lot of variables that determine how to handle demand across multiple locations. Is it a single product family that is produced and shipped to multiple locations or is manufacturing discrete? Are there multiple customers being shipped to or is it one with multiple locations? These are all questions that will determine how to build your forecast.

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How do you manage demand in multiple locations?

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1 Understand your demand patterns

2 Forecast your demand

3 Align your capacity

4 Adjust your capacity

5 Coordinate your capacity

6 Here’s what else to consider

Capacity Planning

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