Understanding the Essence of Supply Chain Networks

Unmatched Demand-Prediction Accuracy with our Demand-Sensing Engine

Leverage advanced AI & ML with the best demand planning software to process large volumes from various sources, both internal and external, to allow for data-driven inventory decisions for every node in the supply chain.

Get accurate demand forecasts with highly granular near-term market insights with AI-led Demand Sensing.

The Success of Sophisticated Networks

Supply chains are complex networks of several nodes and stakeholders that function together to ensure that the end customer receives the right product, at the right place and at the right time.

In this blog, we have tried to understand what contributes to the success of these sophisticated networks in 5 simple visuals:

1. Demand Evolves in The Blink of an Eye

If you think that conventional monthly/weekly cycles are the best way to forecast your demand, then it’s time to rethink your approach. Yes, because by the time you read this sentence, your customer has already scrolled through 5 products!

Your customer demand is evolving in the blink of an eye and you need to keep up with it. AI engines with self-learning capabilities constantly monitor and pick the right demand signals using tailored algorithms for every SKU, channel, store, or warehouse within your distribution.

These demand-sensing engines also factor in crucial demand drivers like promotions, holidays, weather, cyclicity, and seasonality. Further, they offer high precision accuracy by sensing demand changes as close to the customer as possible with their bottom-up approach. This will help you stay on top of your demand trends, come what may.

2. Inventory Planning is Always a Balancing Game Between Replenishing and Liquidating

There is no thumb rule when it comes to planning your inventory. It is important to continuously optimize your inventory and decide what’s the best action item in different business situations. Essentially, the goal here is to be optimally stocked at all of your supply chain nodes to enable faster order fulfillment without any back orders or loss of sales.

Technologies like AI and ML are an effective way to simplify Multi-Echelon Inventory Optimization by monitoring all your supply chain nodes in real-time.

This real-time inventory optimization also helps you foresee what’s coming for you in the future. These tools are capable of smartly sensing any instances of stockouts or inventory wastage well in advance. This way, you can replenish your inventory right in time to avoid an out-of-stock situation or liquidate your excess inventory before they expire. Thus, it’s always better to take proactive measures than reactive fixtures when it comes to inventory optimization.

3. Not All Promotion Strategies Hit the Mark

Promotions are not just a concern for the marketing team. As much as it is important to come up with that killer marketing/promotional strategy it is also equally important to understand its impact on your demand.

With that being said, you don’t have to always jump on the bandwagon to implement all promotion strategies that your competition may be running. Intelligent demand prediction tools are a great way to run price-based simulations and identify those SKUs which can be targeted for certain promotional events and price discounts.

So, the marketing team can also determine which strategies work best and who they should target with these strategies.

This will also enable collaboration between the marketing and operations team to come up with more focused and effective promotional events for maximum revenue.

‍4. Metrics on Supply Chain Performance Matters

Your supply chain lies at the heart of your business and it can offer you a competitive edge when managed efficiently. Hence it is essential to continuously measure your supply chain performance and identify areas of improvement. You can evaluate your supply chain based on key aspects such as reliability, responsiveness, flexibility, and cost efficiency

Here are a few key metrics to gauge your supply chain based on the above-mentioned aspects:

‍Demand forecasting Accuracy
Promotional Impact on demand
Out-of-Stock Losses
Excess Inventory Levels
Safety Stock days
Warehouse Capacity Utilization
Inventory holding days
Supplier lead time and fill rates
Delivery time
Productivity gains on demand prediction and supply planning

‍5. Siloed Spreadsheet Based Planning Can Sabotage Your Supply Chain

Spreadsheets don’t scale as your supply chain does. While managing your supply chain on spreadsheets might seem like a convenient choice, it comes with a cost. Spreadsheets can’t handle the growing size of hierarchies in your supply chain.

Also, they are not capable of predicting demand accurately throughout the life cycle of various SKUs. They are highly prone to errors and involve a lot of manual data inputting. Most of all, they don't offer you end-to-end visibility of your supply chain making real-time planning an impossible task.

And that’s all the more reason to embrace the change with more intelligent and tech-driven tools. Automating your supply chain end-to-end enables seamless collaboration between various teams through inclusive demand plans and better visibility. These tools can make your life easier by automatically adjusting your inventory and safety norms as your demand changes in real-time.

This also means you get more time to focus on other value-added activities rather than redundant tasks.

About the Author

Niki Khokale, Co-Founder & CEO of Fountain9

Niki Khokale is the co-founder & CEO of Fountain9 with over 10 years of experience in Operations Planning and Machine Learning. With Fountain9, she is bringing the power of machine learning to end food waste for food and beverage companies. She has raised funding from reputed investors such as Y Combinator, 021 Capital, Harvard Seed Fund, and impact venture fund Blue Impact Ventures.

Related Resources

Download Cracking The Inventory Planning Code: The Omnichannel Way

Cracking The Inventory Planning Code: The Omnichannel Way
Download the whitepaper to know 3 critical things that can help you design sophisticated inventory planning processes to reduce your inventory costs & wastages. Download Now!