Inaction Based on Aspiring Predictions is Detrimental!

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Do you experience the stress and strain that come with inaccurate business or supply chain forecasts? You might even think good forecasting is a pipedream. But here's the truth: you don't need to wait for miracles. Instead, focus on creating a robust and adaptable supply chain that can respond to any fluctuations in demand.

The Myth of Perfect Forecasts

People often dream of a highly accurate forecast that would eliminate variability and lead to precise execution, schedules, on-time deliveries, and financial accuracy. But let's face it, those dreams rarely come true.

Why? Because the idea of perfect forecasts is an unrealistic expectation! It's important to understand that even if forecasts do improve, they cannot solve every issue in your supply chain. Waiting for better forecasts is an easy excuse, but it won't help you in the long run.

This problem is exacerbated when sales teams work without accountability, often projecting overly optimistic forecasts. To avoid this Supply Chain nightmare scenario, you'll need a completely different paradigm: One that prioritizes a resilient and flexible supply chain that can quickly adapt to demand changes.

A Transformative Approach: Build a Resilient Supply Chain

Creating a resilient supply chain doesn't mean having mountains of extra inventory throughout your channels. However, some strategic inventory placement can significantly boost your flexibility.

Here are several techniques to create a more robust supply chain and reduce your reliance on forecast accuracy:

Get rid of single or sole sourced materials. Implement dual sourcing strategies with pre-approved suppliers that allow you to scale up or down seamlessly.
Standardize materials and services and avoid customization wherever possible.
Review the personalization point of materials—the point at which goods transform from standardized to customized. Defer personalization as late in the manufacturing process as possible so that materials can remain standard for longer.
Reduce all cycle times, lead times, transit times, and processing times throughout your supply chain.
Use vendor-managed inventory (VMI) for strategic materials.
Deploy a "Don't Touch" supply chain strategy to minimize excess handling, movement, and storage of goods. Drop shipping is a great example of cutting out unnecessary steps.
Adopt an agile supply chain strategy to increase flexibility.
Develop an expediting and supply line strategy for quickly addressing parts shortages.
Implement a control tower infrastructure and process for making real-time, informed decisions.
Consider a parallel supply chain.
Expand fulfillment options, enabling any channel to use inventory from any location.
Treat all inventory as if it's in one virtual warehouse that can be utilized anywhere needed.
Build redundant capacity into your system, particularly for peak demand periods.
Simplify every process in your supply chain.
Implement a digital supply chain strategy—a real-time, end-to-end electronic connectivity platform aimed at providing visibility into your entire supply chain and enabling timely response to demand changes.

The Bottom Line

Don't waste your time yearning for better forecasting accuracy. Instead, focus on developing a resilient and robust supply chain that's ready for whatever comes your way. A more flexible supply chain that can quickly adapt to demand fluctuations will serve you much better than relying solely on perfect forecasts.

Stop waiting for better forecasting—it's time to take action and create a resilient supply chain!

Find out more at our website.

Copyright © Mortson Enterprises Inc. All Rights Reserved.

Originally published on May 4, 2021.

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To address the stress and strain caused by inaccurate business forecasts, focus on developing a robust and adaptable supply chain strategy that can quickly respond to demand fluctuations.
In order to build a resilient supply chain, consider implementing techniques such as dual sourcing strategies, standardizing materials, reducing cycle times, and adopting agile supply chain strategies.
A digital supply chain strategy, which provides real-time, end-to-end electronic connectivity, can help increase visibility throughout the supply chain and enable timely response to demand changes.
To further strengthen your supply chain, consider expanding fulfillment options, implementing inventory control measures like vendor-managed inventory, and building redundant capacity for peak demand periods.

Inaction Based on Aspiring Predictions is Detrimental!