In every business owner’s mind, the first thing that matters is to take their brand to the next level by increasing the profitability. The one thing to keep in mind while working towards the objective is efficient supply and demand planning. It can ensure that digital supply chains are efficient for planning and finally driving revenue as well. Now, supply and demand are extremely important aspects of economic activity.
“Supply” can be referred to as the total amount of services or goods available at any given time and price. “Demand,” on the other hand, is the representation of the customer’s wish to purchase those services or goods. By using logistics tools and techniques that can be integrated across your company, the users can run their platform smoother than ever, thereby managing their production and delivery schedule properly.
What Do You Mean by Supply and Demand Planning?
Supply and demand planning can be defined as a supply chain management process used for predicting or forecasting the demand for products so that the customers are satisfied and the business can supply them on time. The main goal of supply and demand planning is to reach a balanced level between meeting customer requirements and having sufficient levels of inventory without any surplus. The factors that influence demand at this level include labour force changes, severe weather, global crisis events, economic shifts, and natural disasters.
Three Primary Aspects of Supply and Demand Planning
Demand planning, from an entrepreneur’s point of view, covers 3 fundamental areas that facilitate business activities such as financial planning, budgeting, raw material planning, sales and marketing plans, risk assessment, production, and mitigation plans. This includes:
- Product Portfolio Management: This stage oversees the overall lifecycle of the product that starts with the introduction of the same to its end-of-life cycle. Product lines, in several instances, are interdependent and knowing how new products have the capability to influence the demand for other products is crucial to maximizing market share.
- Statistical Forecasting: At this stage, you will be able to create supply chain forecasts with the help of statistical algorithms. Here, it is crucial for you to determine the accuracy of all models and identify the exclusions and outliers while you understand assumptions. Any seasonal shift in the data can also be assessed at this stage.
- Trade Promotion Management: At this stage, you can take part in marketing events or trade promotions which can ultimately help influence the demand, especially when we speak about the retail industry. The goal of the said trade promotion is to let the brand connect directly with the consumers through discounts or promotions (if applicable).
How Can a Demand and Supply Tool Help Users?
Effective supply chain optimization is more than just a simple undertaking as it offers several benefits. Some of the most important advantages that a user gets out of effective demand and supply tools include:
- Better Collaboration & Resource Allocation: Effective sharing of information is a crucial part of business flow. With integrated tools that deal with demand and supply analysis, you get to see a big-picture view of the supply chain from beginning to end, thereby allowing you to make informed decisions at the right time. This means that you will be able to allocate work strategically to the resources instead of intuitively.
- Improved Quality Control: By implementing a minimum quality criterion for the product or service, direct suppliers are able to identify and partner with the secondary suppliers who meet those requirements. Such process guidelines can help the suppliers comply with the brand’s quality requirement so you can provide only top-notch products to the end customers.
- Reduced Cost of Inventory: As you integrate a supply and demand tool into your company’s system, you can ultimately reduce the risk of shortage and overstock. This leaves a positive impact on raw materials, assembly components, and finished goods. Through this, you can rest assured that the retailers can shift based on the demand changes when they are mitigating the risk to the manufacturer of getting stuck with unfinished goods.
- Improved Alignment & Communication: If we look at the bigger picture, decisions are not made simply through the purchasing function. The suppliers can also be taken into the loop so that they can collaborate and coordinate to track containers, address real-time issues and maintain minimum quantity requirements, amongst others. While you work towards the collaboration, you can introduce automation and technology in the equation and turn the supplier into a ‘partner’ for the whole procedure.
- Better & More Profitable Outcomes: At the end of it all, the main benefit of introducing such supply chain management tools into the equation is to get improved profit margins from this whole procedure. As you streamline the process, deploy a common data set, and incorporate flexible and agile responses to the customer’s demand, you ultimately make the process more ‘customer-centric,’ thereby increasing profitability in the long run. This way, you can choose the right partners, predict, and even respond to the demand changes in the market as you reduce any disruptions in the supply chain.
The Timber Exchange Demand and Supply Platform
Timber Exchange is an end-to-end supply chain automation software solution that deals specifically with the forestry industry of Sweden and makes the whole process well-structured and smoother. Available to access for the importer and the exporter, Timber Exchange has a feature-rich demand and supply platform that gets updated in real-time. Some of the best features of the platform include:
- Simplifying access to new markets
- A faster way to send offers and calculate the CFR price
- One-stop-platform for trade, tender, and booking freights
- Automating the document(s) generation process
- Finding established and approved producers
- Monitoring shipments
- Simplifying process to import products
- Checking how freight offers are used by customers
As part of the platform, you can keep track of the current demands of products (to be filtered as per types), the supply of timber that the exporters are able to provide the importers with, and how the demand and supply has worked in the past for both the parties.
Here, as a supplier, you can raise a supply note that will feature seller details, offer type, delivery details, payment terms, visibility, product details (including spec and category), and additional documents or pictures. With an importer profile, you can raise a demand note that will feature buyer details, visibility, payment terms, delivery details, product details, and other information (if required). You can edit and update each section, whenever necessary as well.
Color coded aspects of the Timber Exchange platform ensure that you can easily filter out the ones you want to look at to get a quick glance on all your ongoing shipments. This, ultimately, ensures that the entire process remains at your fingertips, including all documentation.
In conclusion, as you integrate a Supply and Demand tool in your business, it is an indication that you are building a well-practised and seamless team. These coherent and concise strategies show that your team works as one, thereby leaving an extremely positive outlook for your business. For more details, feel free to get in touch with the team right away.