Supply Chain Management
Considering the increase in customer demand and intensifying competition within markets, the importance of supply chain management and its complexity is multiplied. As balancing procurement and demand includes uncertainty, this becomes a critical challenge. The basis of the problem is composed of uncertainty and the complexity of consumer behavior as well as the recent increase in demand for customized products. Due to ever-changing customer needs, supplying products in the requested amount and quality is getting harder every day.
Two critical problems occur when procurement and demand are not balanced, they are as follows:
· Income/profit loss and decreasing customer satisfaction due to stock outs
· Increasing inventory costs and decreasing profitability as a result of launching promotions to decrease inventory due to overproduction
Balancing procurement and demand may have been disregarded because customers either purchased products they found or postponed their purchases during the period of limited production. When the competition, product quantity and variety increased, companies started to utilize statistical demand forecast models, but the variations in these models would have noticeable costs to the firms involved.
In light of all these variables, delivering the right quantity of the product at the right place at the right time and keeping costs down becomes all important.
One of the critical phases is forecasting customers demand for different products, or, demand planning. At this stage, several factors should be taken into consideration (promotions, seasonality, etc.). Deloitte is highly experienced when it comes to designing demand planning processes, establishing planning organization and the application of planning software. At the same time, Deloitte has developed several templates to accelerate formation of best-fit planning processes for each sector it covers.