What is in this article?:
Demand planning was the focus of a recent roundtable discussion MH&L moderated among members of the Material Handling Industry's Supply Chain Execution Systems and Technologies Group. Here's what they had to say.
Demand planning isn't what it used to be. It's harder. Even with the help of the latest supply chain execution tools, managers need a strong combination of market knowledge and partnership skills to anticipate and plan to meet consumer demand.
That premise was the focus of a roundtable discussion MH&L moderated among members of the Material Handling Industry's Supply Chain Execution Systems and Technologies Group. This meeting took place at MHI's annual Fall meeting and participants identified key trends managers need to watch if they are to keep up with the whims of online consumers.
Discussion participants were:
Jim LeTart, director of marketing for RedPrairie;
John Reichert, director of product marketing for Tecsys;
Dinesh Dongre, vice president of strategy with Softeon; and
Alan Reigart, vice president with St. Onge.
Serving Multi-Channel Demands
Jim Letart started the discussion by identifying the various sources of demand.
"We went from defined channels where demand planning was based on what was happening in a channel to now an environment where you have many channels and it's not one demand anymore," he said. "There's a whole different series of demands and the fulfillment is now mixed. You're no longer in separate channels and you can't plan each one of them separately.
"Demand planning has to take all the information in from the different sources, some of them new, like mobile," he added. "We also have to fulfill from many sources yet keep all those numbers intact so you can have a demand plan that makes some sense. Mixing those channels together as if they are one is the biggest challenge retailers face today. And they don't know how to do it right now."
The challenge is, multi-channel fulfillment includes direct-to-consumer as well as third-party-managed. Traditional demand planning systems weren't designed to factor-in these channels. They were designed to plot demand patterns based on what one's own DC shipped.
ohn Reichert said it's important to interpret the nature of these demand shifts so that future business can be plotted.
"As demand shifts from one channel to another you have to recognize whether you are adding new volume or if demand is just shifting from one channel to another," he said. "That way you can start to analyze not only where it's coming from or where it needs to go but what is the source. When you're looking to expand your market this will tell you if you're actually capturing a new market."
He predicts that more managers will be able to analyze the curve from a more traditional plan to an e-fulfillment plan over a certain time span and then start to change their physical distribution network to match that forecast.