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Supply chain management

This is Why Influencing Your Customer Demand Should Be Part of Your Supply Chain Strategy

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customer demand

There’s power and efficiency when you’re able to balance supply and customer demand in the supply chain.

There are times that companies focus more on sourcing or production issues since supply chain managers can directly control these. However, focusing on only the supply side the equation may lead to out-of-control expenditures, additional inventory investments, and ineffective solutions.

An equal focus on the demand side of the supply chain can be one of the best strategies you can do in business. When supply chain managers have a thorough understanding of consumer demands, they can implement tactics that can fully optimise the supply chain.

Learning More About Customer Demand

Yes, it is possible to manage the demand of your supply chain. First off, you have to gain an understanding of your customers’ demand patterns.

Take a look at the behaviour of your key customers, those who make a significant part of your revenues. Measure your seasonal demand, average demand levels, and standard deviation of demand for an individual product. The order lead time by a customer and specific product should also be measured. When you analyse the data, it will bring up current practices that need improvement. You’ll also see potential opportunities you can tap into.

How to Influence Customer Demands

You can influence customer demand with the power of consumer data. You can provide tools for your key customers to help them manage, allocate or follow through with large orders. This is especially helpful when you have customers who get large orders and do fulfilment for other companies.

You can also use pricing to influence demand. Strategic pricing can encourage customers to place orders with longer lead times. Adding a premium price for orders with short lead times will make customers more likely to place orders with a lead time more agreeable to you.

Remember not to overlook the opportunities that you can influence demand patterns, which can be advantageous to your business. Optimise the supply and demand side of your supply chain so that you can lessen costs and fine-tune your operations.

The Future of the Supply Chain

The digitisation of the supply chain will help companies address the changing demands of customers and the challenges that come with supply. There are already innovations going on in terms of more accurate, flexible, and faster fulfilment of orders. A definite trend is the individualisation and customisation of orders, which are driving growth and constant change in the supply chain.

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