Retailers Can Learn Valuable Lessons from the World’s Tallest Skyscrapers
When visiting New York or another major city for the first time, the number and size of all the skyscrapers are without question one of the most notable elements. The term skyscraper literally means to erase or block out the sky. These are massive buildings by any account. Undoubtedly, skyscrapers are an impressive feat of modern engineering. However, they wouldn’t be possible without a strong foundation.
Like skyscrapers, retail businesses must also be built on a strong foundation in order to stand firm against the elements. We aren’t talking about physical buildings in this sense, but rather the right solutions which empower retailers to make profitable decisions. In other words, we are talking about the foundation of a profitable supply chain: a profitable demand planning solution.
In a previous blog post, we discussed how demand planning is crucial during a crisis. Demand planning is the stabilizing anchor in a volatile supply chain. Demand planning may sound like old technology, but it is the foundation of a profitable supply chain. However, not all solutions are created equal.
So what demand planning solution is right for you? It depends. There are a number of factors to consider before making a decision. While researching the various options, you should evaluate solution providers to see how they perform and compare the results. At a minimum, each solution provider should offer a pilot or trial so your retail company can see estimated profit improvement before making any final decisions. Once a trial is conducted using your stores’ data, you can see what actual results would be for each solution provider to determine value.
Do demand planning solutions help recover after a period of downturn?
Demand planning is a foundational function of the supply chain. Since shopper behavior seems unpredictable, should you scrap your demand planning structure? In short, no. Demand planning is the anchor in a volatile supply chain.
Even though the supply chain hasn’t kept up with the demand for every SKU, you can still leverage existing data to adjust your demand planning. Eventually, the supply chain will catch up to consumer demand. At the same time, demand spikes for high-value items will decrease. True Demand Planning not only looks at what is selling, but also what could or should have sold if the appropriate stock was on hand. [Read more…]