4/23/2019 Supply Issues and Demand Prioritization | SUPPLY CHAIN MINDED

Supply Issues and Demand Prioritization

By Vijay Baweja

Contribution by Vijay Baweja – Senior Supply Chain Consultant at Bristlecone

Organizations across industries want to enhance their demand and supply planning processes
to achieve better customer satisfaction. Traditionally, supply chains have always struggled with
the need to match demand and supply. As the businesses are growing and supply chains
becoming global, the pace of demand growth has outpaced growth of supply. In such
situations, where supply is limited, what options would a company have to match demand and
supply?

Organizations may increase capacity, add more people, add a shift, buy a new machine, etc.
Such options may serve well in the long term, but in the short term they tend to be slow and
costly, as they require senior management authorization and upfront investments. Apart from
this, the demand may not increase as anticipated, leading to negative returns on investments.
Then what is the alternative? How can organizations work better in situations of overloaded
supply resources without too much investment?

One way to achieve the same would be to identify and work with demand priorities. Once
visibility is gained over di erent types of demands, it will be easier to allocate resources and
budgets. This will also help drive customer service levels. Almost all of the SCM enterprise
applications in the market today provide the feature of demand prioritization. These tools act
as a solver to generate a supply plan based on various demand types likes sales orders, stock
transfer, reservations, etc. And their associated priority based on business policies and
decisions.

Organizations can determine the criteria to be used for sorting of the demand and also
of the sequence in which to cover these demands. Using these priorities, organizations
can generate proposals for capacity and production planning. At the same time, it would
be highly important to maintain a demand repository where an organization can
consolidate and store all di erent types of demands for better reporting and exception
alerts. This will help organizations quickly respond to changing market conditions.
Another important aspect here would be to capture the complete audit trail of a demand
element, which will help in reduction of replenishment delays and improved resource
utilization for future demand.

Thus without heavy investments, demand prioritization can help solve some of the supply
issues along with providing better customer service and visibility into inventory. This approach
puts customer at the centre of the business processes and connects internal and external
resources to meet the demand and running operations pro tably.

Vijay Baweja
Vijay is a supply Chain Professional with 5 years of experience across industries - FMCG, Automotive,
Semiconductors. He has expertise in End to End Supply Chain Planning, Demand Planning, Supply Planning,

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4/23/2019 Supply Issues and Demand Prioritization | SUPPLY CHAIN MINDED
Inventory Management and in depth understanding of Sales and Operations Planning. Post graduate in Management
from Tier-1 B-school in India, Vijay has assisted various organizations in the selection, implementation, and support
for various process improvements and supply chain projects. With his in-depth consulting skills, business
knowledge, and supply chain planning expertise he has handled diverse supply chain challenges & business
problems. At Bristlecone, He performs the role of a Senior Supply Chain Consultant and is also solution owner for
Bristlecone IP - DemandPlanning NOWTM

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