Supply Chain Demand Management: Strategies for Effective Resource Allocation


Companies are always looking to have an edge over the competition. While this is a long-standing success driven approach, it is not always possible without looking at the bigger business structure and practice execution. One of the core areas of interest and development concerns the supply chain and one of the most effective ways of managing this element is through demand management techniques. So, what are the acknowledged strategies for effective resource allocation when it comes to supply chain demand management? Read on to find out all about it.

What is Demand Management?

Demand Management is a way for companies to be more responsive to their consumer requests. It is used to forecast and prepare for potential demands in the supply chain, and when it’s done correctly it is highly effective. It is, essentially, a niche form of planning that becomes necessary within any supply chain business strategy when things are not moving in sync as much as they should be. The three ties that bring everything together are, firstly, striving to gain better knowledge about the selected market; secondly, incorporating internal strategies to become more responsive to this; and thirdly, ensuring that production and therefore capacity align with market demand.

The Core Concepts to Consider

There are three top methods within demand management to bring to the table. While demand management goes beyond these three things, these are the most acknowledged and easiest to implement and grow upon.

One: Monitoring Inventory

There is lots of useful data to be analysed from subjective monitoring approaches around inventory. If you know what runs out and what is left over, for instance, you can be more proactive in what you order and produce.

Two: Promotional Factors

Is there a gap in your marketing waiting to be filled by a promotion? Well, demand management can fill it with informative insight into customer movements and preferences too. The two work together quite nicely.

Three: Looking After Customers

A company will never grow if it doesn’t listen to its customers and respond accordingly. Strong customer service initiatives are indicative of a company that wants to do better and give people what they want.

The Case for Outsourcing

Sometimes, there is a strong argument for outsourcing to an expert company. This allows a company to focus on improving other internal structures while receiving a considered, researched approach to a process that would otherwise be incredibly time consuming. A professional consultant insight can provide more pragmatic and insightful strategies for supply chain demand forecasting. There is also a second argument that considers that professional input means access to a higher level of focussed, and quantitative strategy methods which will arguably make the whole demand management output more effective because it values data and analysis above hypothesis and uninformed projection.

Supply chain demand management is a clever way to establish a clearer picture of what your customers want from your company. Moving strategically within a niche in business means finding out what works and responding to it, as opposed to a generalized forecast strategy that is obviously less effective.