Inbound Logistics | January 2025

Eectively managing increases in demand requires a strategic series of moves—each one calculated to advance your position and ultimately put surges in checkmate. 14 MOVES to Master Demand Surges

S pikes in demand can boost revenue and turbocharge growth. Yet meeting these surges, especially when they’re unexpected, poses risks and challenges. If companies can’t keep up, they risk alienating customers. On the ip side, investing heavily to meet a short-lived demand jump can strain a company’s bottom line and leave it with excess inventory. “Halloween candy is great on October 30 and 31, but it’s not worth much after that,” says Nate Rosier, senior vice president, consulting group leader with consulting rm enVista. While demand spikes aren’t new, they appear to be getting “spikier,” or more pronounced, Rosier says. One reason is the rise of social media inuencers, says Anshuman Jaiswal, vice president of growth strategy and operations with order management software rm Nextuple. One example is the cucumber shortage in Iceland in summer 2024 that resulted from a viral TikTok trend around cucumber salad recipes. IDENTIFYING SALES PATTERNS As marketing and analytical tools grow more sophisticated, companies can identify sales patterns that might not have been obvious before, and then more precisely target customer segments. This enables brands to capitalize on peaks—and can drive surges. In addition, traditional demand-spiking retail events, like Black Friday and Cyber Monday, have grown more complex, with promotions extending for longer periods and spanning multiple channels. “Consumers increasingly engage in ‘pre-shopping’ behaviors, browsing and comparing deals online before making purchases,” says Prashant Agrawal, founder and CEO with Impact Analytics, a provider of retail AI solutions. This has led to unexpected and staggered demand surges, rather than predictable single-day spikes. “A spike in demand can potentially be positive, but it can also be a disaster,” says Travis Tokar, professor of supply chain management at Texas Christian University. A spike may drop off before a company can capitalize on it, leaving customers dissatised. One reason for this is the “bullwhip effect,” or the lack of visibility to a demand surge. Manufacturers are often the last to see data and may be unable to access timely demand signals and then neglect to ramp up production until the spike has already peaked. Rapid surges in demand “inict supply chain uncertainties,” adds Debdatta Sinha Roy, principal research scientist with Oracle.

BY KAREN KROLL

January 2025 • Inbound Logistics 119

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