Christmas Demand Planning

By V Net Team Leader

Dealing with rapid fluctuations in demand can be difficult at the best of times, but adding in uncertainty around Christmas and other periods can turn planning into a powder keg. Whether it’s Christmas in retail, Summer in ice & drinks, or promotion driven events there will always be a need to account for heightened periods of demand. Customer expectations are typically high during these periods given they are trying to hit event deadlines like Christmas day.

With the craziness of sales, extra foot traffic in stores and higher manufacturing demand, strong results can still be achieved. See below some tips on how to maximise product sales while still coming out of the period in a decent stock position:

ABC Analysis

Identifying which products from your range are most important during seasonal periods is vital. Certain products need to be in stock all the time, others may only need to be mostly in stock and others you may be comfortable selling through entirely during the period. ABC analysis is a categorisation method based on the principle that 20% of your products typically account for 80% of sales. A scorecard or formula can be used to grade products and then supply chain processes can be built around these to ensure A products are prioritised and well stocked, B products are adequately stocked, and C products are minimally stocked.

Measuring Demand Variation

Variances in consumer demand play a big role in the difficulty of forecasting seasonal products and materials. A candy can will sell nothing throughout the year but potentially sell thousands of units during November and December, or an Easter egg will peak around March/April. To deal with this, an alternate approach should be used to forecasting the seasonal demand.

Most systems and processes use some form of using historical data and then applying an uplift to forecast seasonal demand. Given the difference in geographical promotional profiles and how consumers operate during this period historical won’t cut it and anecdotal or other methods should be used. It can be as simple as looking at how sites performed in other seasonal/promotional periods or as complex as penetration analysis.

Identify Trends in Advance

With the access to product information and release schedules online, customers are now able to research and identify their seasonal purchases far in advance. This is a double edged sword in that customer expectations are at an all time high, but they are feeding back information to make meeting their needs easier. Utilising rewards programs, industry data and your own organisations social media & online outlets, a fairly accurate model can be developed by feeding this info into the forecast and site profiles.

Seasonal demand planning, at its core, is simple: it’s about understanding what will be in demand and ensure the stock is there to meet that demand. The complexities arise with increased expectations and working where to focus your efforts. Grading your products, understanding how they perform and planning ahead will all go a long way to making your customers happy.

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2018-11-01T23:52:04+00:00