Fueling more accurate demand forecasts
The ability to hone forecasting skills can make the difference between a successful product rollout, or injuring the brand image with product shortages. While there’s no way to accurately forecast demand 100% of the time, companies have the insight to make better planning decisions by getting a real-time look into how much stock is on hand, whether it's feasible to assemble more if needed and being alerted if that product is -- or isn’t -- selling well.
The good news is companies don't need to have a budget the size of Apple's to make smarter, data-driven decisions. With advances in technology and data collection providing more actionable layers of insight, brands can simulate changes in supply and demand and run real-time material requirements planning scenarios in just seconds, storing snapshots of history to enhance analytics for predictive planning. As a result, companies can quickly identify and fix any supply chain problems, such as sourcing delays. By implementing fluid demand and supply plans that are updated in real-time and based on true demand signals, material availability, and capacity, the revenue and profit potential is significantly maximized.
As a testament to the tangible impact of demand forecasting on the bottom line, one of the world’s leading manufacturers of personal computers was able to dramatically improve its forecast accuracy, skyrocketing from 35 to 99% accuracy. By creating a lean supply chain, this company reduced inventory levels by 52%, resulting in $2.3 million in savings.
Developing a lean supply chain
While accurate demand forecasts are essential, running a lean and efficient supply chain is paramount to maintain profitability. The possession of inventory can be considered an asset, but it is an asset that no company wants too much of -- or too little. Finding that level of balance is what will ensure a smooth process in production and sales, as well as within warehouse operations. Implementing certain technologies -- such as point-of-sale data from partnered retailers -- could make a huge difference by providing real-time information to determine the specific time to replenish stock and fulfill customer orders without doing so in excess
No matter how closely product operations are managed, some factors always remain beyond control. By closely monitoring inventory levels and sales forecasts, it's possible to properly anticipate these happenings by keeping an effective amount of safety stock on hand. This safety stock provides increased flexibility and proves beneficial in the event of a product shortfall due to demand having a sharp increase, an issue that Apple most certainly faces.
While most brands would kill for the cult-like following that Apple has amassed, emulating the company's mastery of a seamless end-to-end supply chain operation is undoubtedly more attainable.