Inbound Logistics | January 2025

For example, if a new order starts with green embroidery thread, the system will consider which sewing machines are already working with green thread, eliminating the need to switch thread colors. On slower days, employees prep materials and do enough sewing work to bring inventory stock to the stage before customization is required, Carr says. Cross-training employees has also been key. Algorithms embedded within the management system can determine how to shift work between different machines and employees to meet demand. 3 WORK ACROSS SILOS Effectively meeting demand surges often requires multiple functions within an organization—such as nance, supply chain, planning, operations, and sales—to work together. For example, when retailers plan a major promotion, these departments should connect to ensure, among other things, that they order enough inventory and that each store has the space it needs

Demand for fresh flowers and plants from Fantasy Farms can jump ten-fold leading up to Christmas, Valentine’s Day, and Mother’s Day. To keep up, the company utilizes a robust production planning system and an AI-driven analytics solution for sales forecasting.

suppliers outside of the top tiers can help OEMs re-plan more efciently, cross- sell, or maybe make large spot buys ahead of their competitors, creating a market advantage. Producers who want to build more direct communication lines to all levels of their supply base may need to reassure suppliers in the middle tiers that they are not trying to cut them out of the business. Instead, they are trying to gain more timely, in-depth transparency to events impacting the supply chain. 7 SEGMENT YOUR CUSTOMER BASE While many customers have become accustomed to one- or two-day deliveries, some are still willing to wait longer to receive their orders. Particularly in business-to-business transactions, a company can proactively segment its customer base, identifying those who expect immediate delivery and those amenable to waiting, Thulaseedas says. If the latter group is causing a jump in demand, a company may be able to control expenses by letting these customers know it will start production once it has received a purchase order.

5 BE WRONG IN THE RIGHT DIRECTION The goal in building any demand forecast is to minimize deviations from actual events. Complete accuracy, however, is rarely possible. As a result, it often makes sense to determine whether it’s better for the forecast to under- or over-state actual demand, and then develop a model that penalizes the mistake that would be worse, says Sinha Roy of Oracle. For instance, when determining fulllment and transportation capacity, it may pay to build the model so it favors over-estimating demand. Then if an unexpected jump in demand occurs, the company is better able to handle it. 6 INCREASE VISIBILITY ACROSS SUPPLY TIERS When supply chains run multiple tiers deep, producers tend to connect only with their top suppliers, obscuring visibility to other suppliers. For example, raw material suppliers typically see core challenges 30 to 60 days ahead of original equipment manufacturers (OEMs). Establishing direct communication channels to

to handle the featured products. “You don’t want to run a great

promotion where operations is the last to nd out about it, and they’re not able to keep up with the spike in demand,” says Jeffrey Bornino, president, North America, with TMX Transform. 4 BUILD STRONG DEMAND- MANAGEMENT CAPABILITIES Good demand-planning organizations collaborate with customers as they develop their forecasts. “Customer intimacy is so important,” says Anoop Thulaseedas, associate director of the solutions and consulting business unit with Bristlecone, a supply chain service provider. While many companies focus on fostering closeness with customers at the sales level, it also needs to occur closer to the supply chain. This helps ensure supply chain operations reect expected demand as much as possible.

122 Inbound Logistics • January 2025