I am often asked, “What role does Demand Planning play in the success of a distribution business?” We can offer a variety of technical measures to answer, but there is an old story that illustrates this idea best.


The Camping Story

Two lifelong friends are camping in the woods. Suddenly, a bear appears. Although he is pretty far away, he smells the campers and is on his way. Fortunately, one of the friends sees the bear and alerts the other.


The first camper begins looking for pots and pans to bang and “scare” the bear. He tries to find a natural “weapon” in the forest like a tree branch. The second camper begins to tie on his sneakers. The first camper says to the second “What is wrong with you, you can’t outrun that bear!” 


The second camper replies, “I don’t need to outrun the bear, I only need to outrun YOU!”


How Does This Story Apply?


Myth 1: We tend to think that we have to see far, far into the future in order to improve Demand Planning.

 

Reflection: The truth is that we only have to see what is happening in the market in advance of our competition. A month, a week or even a day or two can give you an advantage. If you can ramp up your orders (or scale them back/cancel) them before your competitors, your inventory will be more of an asset or less of a burden depending on the market conditions. 


Myth 2: We can handle it all by ourselves  with the current system.


Reflection: Can one, five or even 500 humans keep track of every item in your inventory? You don’t want to fall into the trap of trying too hard to do the wrong things. 


Myth 3: Artificial Intelligence (AI) sounds expensive, and my company doesn’t need it yet.


Reflection: Compare that cost to the expense of making an inventory mistake. How expensive is it to be caught off guard with too much or not enough inventory?


Less Overstock and Out-of-Stock with Intuilize

ERP month end reports can be the rearview mirror that helps identify inventory we shouldn’t have bought (overstocked), and is therefore a current liability. 


Furthermore, organizations almost never measure what it costs when they don’t have the inventory that your customer wants to buy(out-of-stock). 

Both are expensive and usually only one gets measured. 


The Pandemic is a once in a lifetime event. Not many analysts or analytics could have seen that coming. But preparing for the recovery, analytics has outperformed people in terms of anticipation and reaction to changing market conditions.


Last Word

While recent events can seem overwhelming at times, it is a relief that you do not have to outrun the bear. Take a look around you and think through some of those incremental Demand Planning advantages that you can run faster than the second camper. 


Intuilize can be your running shoes! 🙂

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