While a lack of demand can be concerning, being unprepared for increases in demand can be just as damaging to the expansion of your operation. Learn how to evaluate potential risks, and respond to increased demand through a variety of tools and techniques.
- Potential risks to scaling with demand include poor receiving and put-away processes, demand forecasting issues, operational constraints, and personnel.
Your organization can scale with demand using flexible supply chain optimization software, automation, effective demand forecasting, and by eliminating bottlenecks.
- The right technology can help you monitor risks and avoid pitfalls.
A variety of internal and external factors can contribute to an increase in demand. They can happen either gradually or in a sudden and unexpected boom, as we have seen throughout the pandemic.
Operating without properly assessing the factors that affect your business’ success, or developing strategies based on these factors, can lead to significant and negative impacts throughout your entire supply chain. This is true in times of both low and high demand, but for this blog, we’ll be focusing on high demand.
Evaluating Potential Risks
Some barriers to efficiently meeting increased demand are easier to predict and evaluate than others. The easiest place to start is within your organization. This is because analyzing your internal processes and technology lets you identify the areas of potential risk that you can more easily address immediately.
Each operation is different, and has its own unique set of challenges, but some general areas to consider for your internal evaluation can include:
Poor Receiving and Put-Away Process
This can create a bottleneck effect where incoming shipments are backlogged. This costs both time and money, and makes it that much more difficult to fulfill incoming orders in a timely fashion as demand increases and more products are coming into your operation.
Demand Forecasting Issues
Improper forecasting can lead to a number of inefficiencies with order fulfillment, such as over or under-stocking. Forecasting tools can be useful for predicting the right amount of inventory to order before you need it.
Sometimes the tools you have available aren’t quite enough to deal with an influx in demand. When your resources are limited, but you expect an increase in demand, it may be time to look at 3PL or other outsourcing options.
Your team has to work in tandem to provide stability when you need to respond rapidly to an increase in demand. Evaluating your team’s performance and identifying any areas for improvement should be done regularly. Creating an environment of open communication can help identify potential problems early and deal with them promptly.
Ensure Your Fulfilment Can Scale With Demand
Having a fulfillment process designed to scale easily according to the demand your operation is seeing is crucial to the success of the entire supply chain. Everything within an operation works in tandem to provide the best fulfillment conditions. Every step can be optimized to scale using different tools, software, and processes. Examples can include:
Flexible Supply Chain Optimization Software
When choosing the tools to help optimize your operation, such as a Warehouse Management System (WMS), OMS, and Inventory Management System (IMS), it is important to choose software that has the ability to scale as you do.
Whether you're planning for a gradual scale, or you would like to prepare for large and seemingly random fluctuations in demand, it is important to have software that helps your growth, not hinders it.
Automation is a great way to carry out monotonous processes such as cycle counts. This frees up your team to put their efforts toward more intricate and important processes. Automation can also free up your team to focus on tasks that are costlier to automate, such as picking and packing. This can be another great way to handle an influx in demand.
Effective Demand Forecasting
Forecasting, as mentioned above, is crucial to making proactive decisions, rather than being forced to act reactively, which can be costly and time-consuming.
The best way to forecast potential demand is to use:
- Using data from the industry as a whole
- Data specific to your inventory type
- Internal historical data is the best way to forecast potential demand.
This allows you to make a list of potential outcomes so you can better plan for a variety of situations.
Mitigating bottlenecks that can appear in the receiving and put-away processes helps you to be better prepared for increases in demand.
Eliminating bottlenecks can be more easily accomplished by using software and technology. These tools help you effortlessly track inventory from end to end to ensure a seamless flow through your operation.
How Software Facilitates Scalability
When it comes to scaling, or optimizing, processes like fulfillment, implementing software and technology can be incredibly valuable.
An increase in demand requires a system that can easily track orders from end to end with full transparency. This allows you to better forecast supply and demand. It also helps you make proactive decisions that make your supply chain run more smoothly and without error.
Routeique provides businesses with dramatically increased transparency and accountability. By effortlessly managing inventory and order processes, Routeique helps guide your scaling goals.
Additionally, Routeique gives you more control and insight into your order processes. You can even automate your POs to ensure you have the right amount of inventory whenever you need it.
This level of granularity makes areas of weakness more visible so you can focus optimization efforts where they are truly needed.
To find out more about how to succeed in today’s complex supply chain space, check out our other blogs. They cover topics ranging from keeping warehousing costs low to adding efficiency to your transportation operation.
Or, if you’d like to get in touch with our team and learn more about Routeique’s solutions, fill out the contact form below!