The Balance Between Supply and Demand
Supply Chain is a hard business area, where you need to have a perfect balance between demand and supply.
In order to have an efficient supply chain,
- Demand planning is the 1st step. Better forecasting saves you time and gives you the opportunity to build up an inventory plan.
- Inventory management and warehouse utilization is second. This is both about the materials, raw ingredients and finished goods. You need to have set the rules for stock levels (whether you are willing to keep more stock in case of an oversale or not depends on how flexible your production/suppliers are to demand volatilities). Also alternative material/product options must be identified so that you can have some flexibility with the alternatives.
- Supply planning counts on suppliers’, transporters’ and purchasing processes and 3PL performance if you are working with one.
Most importantly it is all about how good you are with handling the stress and making plan B, C, D, etc. Because supply chain is all about estimation of possible variations and managing unexpected issues! This is an exciting and colorful world…
Supply and Demand Balance is one of the most important keys to success in the Supply Chain.