If 2020 has taught us anything, it’s that you never know what’s headed your way.
That’s especially true in logistics, where crises can have wide-ranging, unforeseen effects. A crisis may flatten demand or send it soaring to new peaks. According to leaders in the transportation sector, the COVID pandemic didn’t just sink demand. It was notable for creating “broad imbalances,” depending on which sector you were in.
In other words, the future will always be unpredictable. So how can you simultaneously prepare for both peaks and valleys in product demand? Here are some strategies that will prepare you for either situation.
PREPARING FOR HIGH DEMAND: FORECASTING AND STRATEGIC PLANNING
Data suggests that the average inventory rate is much lower than people think. It may be as low as 65% in the U.S. In some cases, improving inventory accuracy is enough to help you prepare for the unexpected. But it’s important that you have inventory management measures in place. Old techniques are headed for obsolescence. Here’s what you need for accurate inventory these days:
● Real-time data. To deal with demands peaks or valleys, you need real-time data feeding to a dashboard. This provides an accurate snapshot of your current inventory
● Identifying slow-moving products. When you know what your slow-moving products are, you’ll know where to shift resources. Your staff, money, and time can all focus on more in-demand products.
● Eliminating “motion waste.” With live data, you can optimize current inventory to respond to demand levels. This eliminates wasted motion by ensuring staff focus on high-impact shipments.
● Inventory reconciliation. Taking time to measure your inventory can slow things down temporarily, but it can give you an accurate snapshot that prepares you for a sudden shift in demand.
Inventory accuracy isn’t just about knowing where things are. Having an accurate picture of your inventory provides a map for your preparation. It allows you to deprioritize non-essential shipments and focus energy and resources on the products most likely to experience high demand.