How An Integrated Supply Chain Network Can Help Avert Your Next Supply Crisis

Adam Peanna

After appearing on the TV drama “Ode to Joy,” the popularity of Australian-made Weet-Bix has hit epic proportions in China. In fact, the lift in demand is so high that some people are selling the staple breakfast cereal online for as much as $50 per box.

Is it possible to satisfy this sudden increase in demand quickly without eroding profits? How can any company detect this influx in demand sooner – long before the planning process indicated that the inventory level was so low that it couldn’t meet customer needs? When you consider that this crisis surfaced two months after the original episode aired, this situation is a good example of how increasing momentum in demand can accelerate as consumers try to acquire the product and talk about it on social media.

As a fundamental part of the integrated business planning process, early alert detection and demand sensing can help ensure a balance between demand and supply. Plus, it gives decision makers a chance to simulate scenarios to determine the most cost-effective approach to achieving desired outcomes.

In addition to detection and sensing, demand signal management enables companies to detect trends as they happen from many internal and external sources including social media as well as retail, distribution, and wholesale channels. This approach takes this data, which can vary widely between partners and regional business location, and enriches and harmonizes it so that decision makers can access a full view of sales and production performance.

demand sensing and prediction

Demand sensing forms an independent, granular predictions based on daily trends and detects movement changes based on factors such as sales, shipments, and intelligence from demand signal management. By comparing values from the consensus demand plan and the sensed forecast, the company is immediately alerted once changes outside the norm happen.

deviation detection between demand forecast and actual demand

With integrated business planning, you can connect all these capabilities together and use them as the foundation for any discussion, consensus building, and decision making that underpin the overall operating plan. But more important, your decision makers gain the insight needed to make sure every functional area impacted by changes in demand, inventory, and supply runs smoothly – even if demand for your product spikes.

Find out how your company can benefit from SAP Integrated Business Planning. Contact me at adam.peanna@sap.com.

 

 


Adam Peanna

About Adam Peanna

Adam Peanna is a Senior Extended Supply Chain Solution Specialist for SAP. He has over 20 years of supply chain experience covering both operational and technology roles across Integrated Business Planning and logistics execution including warehouse and transportation management. He has a deep background in supply chain problem solving including system and process implementations, team leadership and enterprise software. His current activities support the SAP extended supply chain strategy, leveraging the integrated SAP approach to supply chain and growing the successful network of SAP customers. Adam is also an active member with a number of supply chain community networks and completed studies to obtain a masters of supply chain management.