I have been involved with demand forecasting practices for practically my entire career. I wrote an earlier foundational article called HOW an Agile Data-Centric Demand Forecasting and Planning Process is So Beneficial in a Disruptive Supply Chain Environment here noting that conventional modeling assumptions may no longer work effectively in a 21st century supply chain environment, where unusual events and outliers tend to distort demand patterns. Now here is the WHY:
- Improved responsiveness: With an agile approach, organizations can quickly adapt to changes in demand patterns, supply disruptions, and market dynamics. By incorporating real-time data into the forecasting and planning process, decision-makers can identify emerging trends and promptly adjust their strategies.
- Enhanced accuracy: Traditional forecasting methods often rely on historical data and assumptions that may not be valid in a rapidly changing environment. The agile approach leverages real-time data and statistical modeling techniques to generate more accurate predictions. This helps organizations avoid stockouts or excess inventory, ensuring a more efficient and cost-effective supply chain operation.
- Better visibility: Agile demand forecasting and planning utilize data-centric tools and technologies that provide greater visibility across the supply chain network. This enables organizations to identify bottlenecks, risks, and opportunities at various stages of the process, facilitating proactive decision-making and risk mitigation.
- Increased collaboration: Agile processes foster collaboration and communication between different stakeholders involved in supply chain management, including sales, marketing, operations, and logistics. This alignment and synergy enable a faster and more coordinated response to changes in demand, supply, or external factors such as regulatory changes or natural disasters.
- Continuous improvement: An agile approach encourages a continuous improvement mindset by regularly reviewing and incorporating feedback from various sources, including customers, suppliers, and internal teams. This iterative process allows organizations to refine their forecasting and planning models, respond to emerging trends, and fine-tune their operations based on real-time insights.
- Cost savings: By accurately forecasting demand and optimizing inventory levels, organizations can reduce costs associated with excess inventory, stockouts, and expedited shipping. Additionally, proactive planning and scenario analysis in an agile environment help organizations identify cost-saving opportunities and minimize risks related to supply chain disruptions
Overall, an agile data-centric demand forecasting and planning process enables organizations to navigate a disruptive supply chain environment effectively. It promotes agility, responsiveness, and collaboration, resulting in improved customer satisfaction, reduced costs, and a competitive advantage in the market.
risks related to supply chain disruptions
CEO bei SPL
1 年Hi Hans, collating the actual operating business problems and providing the up-to-date solution in ONE sentence deserves high respect and admiration of the philosophical depth in thinking. - But in my thinking your arguments cover perfectly a (not specified) certain segment of business, the segment of still "manageable" disruptions, self-evedent but often missing in-house (only?) collaboration utilizing the actual tool-kit of real-time data and assuming, disruptive events representing new trends. To me, forecasting and planning represent the necessity of identifying the proportion of relevant driving forces of processes under review and estimating the proportion of randomness in the data. Enhanced forecast accuracy depends on little random infection of the process data. - To me, your approach induces the inherent problem of creating hisorical data supporting the next forecast, after real-time reactions and managing proactively 'disruptions' and adaptations of strategies. - All you said is right for certain business segments. My comments intends to mention, that the devil hiding behind real life could not jet be killed. BR & Compliments
Supply Chain Director
1 年Great insights! What strategies have you found most effective for agile demand forecasting in unpredictable markets? #demandforecasting #demandmanagement #demandplanning #agileforecasting