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Tag: best supply chain management course

What are the 6 Types of Supply Chains?

Posted on by Imarticus Learning

Businesses cannot undermine the importance of supply chain management. Establishing and operating a global supply chain is indeed highly complex. Using an inappropriate supply chain model might lead to business disruptions and risks, causing potential damage to the business and increasing costs simultaneously. 

Therefore businesses must understand the significance of supply chain models and their types of purposes. There are primarily 6 types of supply chains. Read on to learn more about these supply chains for proper sales and operation planning.  We’ll also be talking about the types of supply chain management in this blog.

Becoming a proficient logistic professional requires learning and understanding the fundamentals of supply chain models. If you are interested in making a career in the supply chain industry, enrolling in an IIT supply chain management course will be of great help.

Supply Chain Management Certification Course 

What is a Supply Chain?

Before we move on to discuss the 6 types of supply chain models, let us understand what a supply chain is in the first place. A supply chain is the sequence of activities for a commodity right from its manufacturing to reaching the market. A supply chain is inclusive of manpower, various equipment, different modes of transportation, and technology. 

Let’s move on to understand different types of supply chain management-

6 Types of Supply Chain Management

The majority of businesses adopt the 6 types of supply chain management models as per their business requirements and operations. The models are further grouped into two categories namely supply chain models oriented to efficiency and supply chain models oriented to responsiveness.

Let us discuss the models in detail now.

  • Supply chain models oriented to efficiency

This is one of the most important types of supply chain management techniques you should know. There are many industries like paper, steel, cement, general commodity manufacturers, low-cost fashion, etc. where the value proposition is oriented to various metrics like low cost, total cost, and even relevance of raw material asset utilisation. In these industries, there is a high priority on end-to-end efficiency. 

There are 6 supply chain models, which come under this category. They are as follows:

‘Continuous’ flow model

This model is perfect for industries with high-demand stability. The manufacturing process in this model targets generating a regular flow of information and products. This model is most suitable for industries where there are minimal variations in customer demands. 

Because of the competitive positioning of this model, it provides a continuous replenishment system. This assures low inventory and high service levels at customers’ facilities. It is important to understand this concept to aid the significance of the significance of supply chain models. 

‘Fast’ model

One of the most important types of Supply Chain Management is this Fast model. This supply chain model is highly suitable for businesses manufacturing trendy items with short lifecycles. Consumers keep an eye on updates from the manufacturer regarding their latest product portfolios.

Companies adopting this supply chain model usually focus on minimising the span between idea generation and launching the product in the market. They attempt to maximise the forecast accuracy levels for reducing the market mediation expenses. 

‘Efficient’ supply chain model

This type of supply chain management model is for industries which belong to highly competitive markets like the cement and steel industries. The main motto of this model is maximising end-to-end efficiency along with increased rates of asset utilisation to reduce costs.  

With this type of supply chain management model, the business expects to provide accurate production forecasts for preparing raw materials and machinery accordingly. The competition is almost completely based on cost. 

  • Supply chain models oriented to responsiveness

There are many industries that are marked for high demand uncertainty. Here the market mediation expenses are the top priority. In such businesses, there is the employment of supply chain models which are oriented to responsiveness. The three models are as follows:

‘Agile’ supply chain model

There are many companies that manufacture products as per customer specifications. This model is ideal for companies with unpredictable demand. In this model, there is the use of a make-to-order decoupling point. This means that the product will only be manufactured after getting purchase orders from the customer. 

To guarantee agility in the supply chain, the primary focus should be on the capability of producing products in excess capabilities and in the smallest possible batches. 

‘Custom-configured’ model

This supply chain model is perfect for products where there is a requirement for potentially unlimited or multiple product configurations. This model has a high correlation between total cost and asset cost. 

Product configuration takes place during the assembly process where the assembling is done as per the specifications of the customer. This supply chain model has a unique combination of the different processes of the agile supply chain model and the continuous-flow supply chain model. 

‘Flexible’ supply chain model

The flexible supply chain model is ideal for industries that have two distinct phases of product demands. There is a time when there is a high demand for the products, which is followed by long extended periods of low demand. 

This model is highly adaptable with the ability to reconfigure internal manufacturing processes for meeting specific customer requirements or solving problems of customers. For the success of this supply chain model, the management must concentrate on flexibility and other capabilities for developing a quickly reconfigurable process flow. 

Summing It Up

Each of these supply chain models comes with its share of pros and cons. Interestingly, all the models might not be suitable for all businesses. Businesses need to identify the most suitable supply chain model for their supply chain management.

With the right model in place, businesses can improve their efficiency, make better sales and operation planning along with mitigating exposure to various kinds of risks and disruptions. Businesses can get a competitive advantage in their supply chain with the choice of the right supply chain models. If supply chain and logistics interest you, you can take up Imarticus Learning’s Professional Certification in Supply Chain Management & Analytics by IIT Roorkee.

This IIT supply chain management course is designed in collaboration with industry leaders and CEC, IIT Roorkee. The aim is to provide candidates with cutting-edge experience for making an entry into the supply chain and operations industry. The course includes live instructor-led sessions and online discussions along with projects and exercises, assessments and assignments, a Capstone project and most importantly due career support.

On successful completion of the course, you can make a great career as a Supply Planning Analyst, Supply and Operations Planner, Procurement Specialist, Logistics Manager, Quality Assurance Manager and so on. Visit Imarticus Learning for information on more such courses. 

Role And Importance Of Sourcing In Supply Chain

Posted on by Imarticus Learning

Many parameters have to be taken into account to manage a supply chain effectively. Comprehending the importance of supply chain management is vital for any business looking to enhance operations, cut costs, and efficiently meet customer demands.

From warehouse management to shipping, many moving parts must work together to make sure that goods are supplied on time and at the right price. However, sourcing is a crucial element that is frequently neglected.

We’ll delve deeper into the role of sourcing in the supply chain and its importance in this article.

Role Of Sourcing In Supply Chain

In business, sourcing refers to the processes used to choose suppliers who can offer the products and services necessary for operating your business.

The following are some of the functions of sourcing and its Importance In Supply Chain Management:

Purchasing raw materials

Supplier preferences

Designing products

Manufacturers working together

Procurement

Determining the cost of goods sold

Inventory management and activity

Product Quality

Financial implications

Sourcing: Importance In Supply Chain Management

The significance of sourcing in supply chain management has been overlooked by many companies. Without a strategic sourcing strategy, you may find it difficult to acquire the appropriate resources, goods, or services at the appropriate cost and quality, which can have an impact on your revenue and success.

A supply chain’s performance depends on several essential sourcing elements. These consist of:

1. Supplier Selection

Choosing appropriate vendors is one of the most crucial aspects of sourcing. This entails assessing prospective suppliers according to a range of criteria. Reliability, price, level of service, and transportation competencies are some of the parameters.

2. Negotiation

Negotiation is an important aspect of sourcing because it can assist you in getting better terms and prices from your vendors. A solid grasp of your wants and goals as well as the market circumstances are necessary for effective negotiations.

3. Risk Management

Managing hazards related to the sourcing procedure is one of the most challenging tasks. It involves detecting potential risks, such as delays in the supply chain or quality problems, and creating backup strategies to reduce those risks.

Advantages Of Strategic Sourcing

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The following are some of the incredible advantages of strategic sourcing in supply chain management.

It boosts the volume of your cost reductions by finding and choosing vendors who will provide the best value at the best price.

It enables you to bargain for lower unit costs when making large purchases, lowering the cost of products sold.

It helps vendors by providing them with regular sales and long-term cash flow information.

It gives businesses more time to concentrate on their core competencies.

Strategic sourcing assists you to develop steady supply chain relationships, particularly for businesses that depend on disruption-prone products and services.

How To Streamline Sourcing?

The following are some of the effective approaches to streamline your sourcing processes:

1. Creating A Strategic Sourcing Plan

To ensure that sourcing is performed strategically and effectively, you should create a detailed sourcing plan that details your goals, strategies, and methods for procuring materials, goods, and services.

2. Technological Investments

Technology is essential for simplifying and improving the entire sourcing process. You can enhance your sourcing skills by utilizing automated purchase systems, vendor management software, and other technological solutions.

3. Developing Strong Relationships with Vendors

By developing strong relationships with vendors, you can reduce hazards related to the sourcing process and obtain better prices and terms. Building solid vendor partnerships requires regular contact, collaboration, and an emphasis on reciprocal benefits.

Importance of Supply Chain Management Course

Enrolling in a Supply Chain Management course can be advantageous if you want to strengthen your organization’s supply chain management strategy.

A supply chain management course can provide you with the insights and skills you need to improve your sourcing responsibilities and overall supply chain control plan.

You can acquire the following by registering for a supply chain management course:

Create and put into action a strategic sourcing plan that supports the overarching aims and objectives of your company.

Identify possible risks related to sourcing and create strong backup strategies to reduce those risks.

Utilize technology to simplify and enhance sourcing operations.

Develop reliable partnerships with vendors to get better deals and conditions and prevent delays in the supply chain.

Conclusion

Sourcing is an element of supply chain management that has a strong impact on your business’s success. By adopting a strategic sourcing strategy and investing in technology and vendor relationships, you can strengthen your sourcing skills, increase revenue, and maximize competitiveness.

Your knowledge and abilities in this area can be further improved by enrolling in a supply chain management course offered by Imarticus Learning. Register now and gain the knowledge and expertise to streamline your supply chain processes, reduce costs, and increase efficiency.

Join today and start transforming your supply chain management skills!

Supply Chain Transparency: Meeting Consumer Demand for Ethical Sourcing and Product Information

Posted on by Imarticus Learning

The concept of supply chain transparency has been around only for some time now. In recent times, supply chain transparency has emerged as a crucial concept depicting a paradigm shift from traditional business practices.

With heightened consumer awareness, stricter regulatory practices, and policies for ethical trade practices, the significance of supply chain transparency has increased. 

Companies must actively understand the events taking place upstream in the supply chain and effectively convey this information both within the organisation and to external stakeholders for supply chain transparency.

In this blog, we will explore the elements of supply chain transparency in detail that would help to pursue a career in supply chain management. Keep reading to learn more.

What Is Supply Chain Transparency?

Supply chain transparency is the extent to which the various stages, processes, and entities involved in producing, distributing, and delivering goods or services are open and visible to stakeholders and even to customers. 

It involves sharing comprehensive information about sourcing, manufacturing, distribution, and environmental or social impacts. This transparency fosters accountability, ethical practices, and informed decision-making throughout the supply chain. 

By disclosing details about origins, practices, and conditions, companies enhance trust among consumers, investors, and regulators, while promoting sustainability and fair labor standards. Overall, supply chain transparency ensures a clear view of the journey a product takes from its creation to reaching the end consumer.

Benefits of Supply Chain Transparency

The benefits of supply chain transparency are discussed below: 

  • Customer Loyalty: Transparent supply chains foster customer loyalty by showcasing sustainability efforts and product origins, resulting in increased revenue from repeat customers. 
  • Enhanced Conversion Rates: Shifts to purpose-driven messaging lead to improved conversion rates, click-through rates, and email revenue, underscoring how transparency positively affects customer engagement. 
  • Stronger Customer Connections: Such sustainable practices create deeper emotional ties between customers and brands, yielding substantially higher lifetime value. 
  • Trust and First-time Purchases: Transparent brands are likely to enjoy more consumer trust and are preferred by buyers making initial purchases, particularly those emphasising ethical practices. 
  • Durable Supplier Relationships: Establishing robust supplier ties ensures ethical practices and quality, translating to fewer errors and recalls, and reinforcing supply chain robustness and profitability. 
  • Preparedness for Regulations: Transparent supply chains proactively address disruptions and align with evolving regulations. Emerging laws emphasise supply chain transparency.

Challenges in Achieving Supply Chain Transparency

Achieving supply chain transparency might be difficult. Here is why:

  • Complex Global Supply Chains: Modern globalisation has intricately woven complex supply chains, often involving multiple tiers of suppliers, making it difficult for companies to trace the origin of goods and monitor practices at every level. 
  • Outsourcing and Subcontracting: Suppliers may outsource production to third parties, leading to challenges in ensuring fair labor practices and ethical standards throughout the extended supply network. 
  • Opacity in Lower Tiers: Human rights abuses and environmental violations frequently occur in lower tiers of suppliers, which can be challenging to monitor and address effectively. 
  • Limited Control: Even when ensuring ethical practices at one stage, factors like cancelled orders by other brands can jeopardise the fair treatment of workers, revealing the limited control brands have over the entire supply chain. 
  • Accountability Pressures: Consumers hold brands responsible for any supply chain issues or inaccuracies, even if the complexity of global supply networks makes complete oversight challenging. 
  • Managing Expectations: Brands must educate consumers about the intricate nature of supply chains to manage expectations while maintaining transparency to build trust. 
  • Shifting Standards: Changing regulations, certifications, and internal goals create complexities in new product development, requiring adherence to evolving standards and sourcing compliant suppliers. 
  • Balancing Disclosure: Striking the right balance between transparency and protecting sensitive information poses a challenge, as disclosing too much could have unintended consequences. 
  • Sourcing Challenges: Developing products that meet stringent ethical and environmental standards demands sourcing from manufacturers and vendors that align with these requirements is tough.

Strategies To Attain Transparent Supply Chains

As supply chains become increasingly intricate, following these steps can help companies achieve transparency, align with ethical standards, and build resilient relationships with suppliers and customers: 

  • Risk Identification and Prioritisation: Begin by mapping your supply chain, understanding its complexities, and identifying vulnerabilities. Assess past disruptions, potential issues, and upcoming regulations to determine areas for improvement. 
  • Establish Goals: Based on the insights gained, set comprehensive goals for supply chain transparency. Embrace a holistic approach, addressing both environmental and social concerns, and collaborate with suppliers to align on shared objectives. 
  • Develop a Code of Conduct: Create a robust code of conduct that outlines the ethical and sustainable standards you expect from suppliers. Collaborate with suppliers to ensure alignment and commitment to these goals, addressing specific issues like safety and environmental impact. 
  • Measurement and Progress Tracking: Define clear metrics to measure progress towards your transparency goals. Utilise tools such as the Higg Index for standardised sustainability assessment, engaging both self-assessment and third-party verification for accurate evaluation. 
  • Supplier Relationships: Recognise the importance of relationships in supply chains. Support suppliers in meeting goals by offering financial investment or resources, fostering mutual growth and improvement. 
  • Stakeholder Disclosure: Communicate your progress transparently to stakeholders and customers. Avoid complexity and make actions understandable. Simplify disclosures to make it easy for consumers to comprehend your environmental and social impact efforts. 
  • Direct Customer Engagement: Connect customers directly to producers and suppliers in your supply chain, fostering a deeper understanding of the process. This not only enhances transparency but also enriches customer experience and quality improvement. 
  • Continuous Monitoring: Recognise the dynamic nature of supply chains and implement regular progress assessments. Continuously refine strategies and practices to ensure sustained transparency and alignment with goals.

Conclusion

Supply chain management optimises business operations and helps drive the overall success of any organisation. Supply Chain Managers contribute by enhancing efficiency and upholding customer expectations while reducing costs. Thus, supply chain management has emerged as a lucrative career option due to its increasing demand. 

If you want to pursue a career in supply chain management but do not know where to start, head to Imarticus Learning for a beneficial supply chain course. Imarticus Learning, in partnership with IIT Guwahati, has designed a comprehensive digital course for aspiring Supply Chain Managers. The Advanced Certification Program in Digital Supply Chain Management deals with aspects of vendor management, supply chain transparency, procurement, and much more to make students industry-ready. 

Not just this, at Imarticus Learning, students are given 100% placement assistance so that they can only focus on brushing their skills and not worrying about bagging a job. Head to Imarticus Learning to know more. 

Demand Forecasting: A Crucial Component of Supply Chain Management

Posted on by Imarticus Learning

Do you want to discover how to make your supply chain more efficient and less expensive? Would you want to discover how to foresee client demand and make necessary plans? Do you want to improve your company’s performance and gain an advantage?

If you said yes to any of these questions, you must be familiar with demand forecasting. Estimating future demand for goods or services using historical data, market trends, consumer behavior, and other variables is known as demand forecasting. It is a crucial part of supply chain management because it enables you to match the demands of your customers with your production, inventory, distribution, and marketing plans.

supply chain management courses

In this post, we’ll talk about the value of demand forecasting, how it affects supply chain management, and how you can learn more. By the end of this post, you will better understand how demand forecasting can help you achieve your business goals and improve customer satisfaction.

What is Demand Forecasting?

Demand forecasting is the practice of making future predictions. It involves looking into a crystal ball and predicting client preferences before they are even aware. Businesses may use this information to allocate resources sensibly, improve their supply networks, and create long-term plans.

Techniques for demand forecasting often fall into one of two categories: qualitative or quantitative. While qualitative techniques rely on subject-matter expertise and intuition, quantitative approaches make predictions using data and analysis. A certain firm’s best course of action will depend on its particular set of circumstances.

Demand forecasting is a potent tool that may keep firms ahead of the curve, regardless of the approach employed. Businesses can decrease costs associated with stockouts and surpluses and increase customer satisfaction. Businesses may make intelligent resource allocation choices, optimize their supply networks, and plan for the future using this knowledge.

The practice of foreseeing demand or pricing for a product — or a variety of items — in a certain sector is known as supply chain forecasting. For example, the algorithms underlying a forecasting model can anticipate a product’s price by examining data from suppliers and buyers.

Read Also: Best Practices For Supply Chain Planning

Types of Demand Forecasting

Demand forecasting frequently bases its predictions on past sales data. Other contributors include seasonal highs and lows in demand, recurring economic patterns, and market movements. Utilizing statistical forecasting, demand forecasting software aids in developing sales predictions.

There are several forms of demand forecasts. Your supply chain’s demand planning may use a variety of methods. You can have several sales projections for various periods. Forecast accuracy is greater with short-term forecasts. 

However, depending on your supply chain’s cycle duration, a long-term prediction could be necessary for inventory management. Short-term forecasting is defined as up to a year in the future. Planning for long-term demand forecasts demand for up to four years.

Forecasts of demand might be internal or external. An external forecast considers how current market and economic conditions may affect future demand. A demand planner considers changes in consumer demand, consumer spending habits, and the overall state of the economy when generating an external sales forecast.

On the other hand, internal demand planning aims at the capability of your internal supply chain and staff. The availability of resources to fulfill seasonal demand can be determined via internal demand forecasting. Planning for internal and external demand is crucial for producing a precise projection.

Demand Forecasting Techniques

There are several distinct demand forecasting method choices you may utilize within the realm of qualitative and quantitative forecasting:

  • Collective Opinion collects historical data about consumer demand by utilizing the expertise and experience of a company’s sales force.
  • Client survey methods offer important details about client requirements, wants, and expectations. Although it might be challenging to foresee real demand, this data is important for establishing sales forecasts.
  • The Barometric Method is a technique for anticipating active demand that uses economic indicators to gauge past, present, and future activity and anticipate patterns.
  • The Expert Opinion Method seeks professional judgment from outside consultants to determine future action.
  • The market experiment method uses controlled market experiments to inform merchants about customer behavior.
  • Using the statistical technique, a business may find and examine the connections between various factors, establish performance history through time, spot patterns, and estimate probable future trends.

What is the importance of Demand Forecasting?

Demand forecasting is important for several reasons. 

Here are some of the benefits of demand forecasting:

  • It assists in optimizing the inventory level. By anticipating the demand for your products or services, you may avoid overstocking or understocking, which can lead to waste, spoilage, obsolescence, or stockouts. Reduce costs associated with storage and handling to increase cash flow.
  • It aids in the planning of your production and purchasing. You can appropriately plan your production and purchase schedules by predicting the demand for your goods or services. Utilizing resources like labor, machinery, materials, and energy can all be optimized. Additionally, you can prevent production interruptions or delays brought on by shortages or surpluses.
  • It aids in the management of your logistics and distribution. Creating a demand prediction for your goods or services can help you organize your logistics and distribution processes.
  • It aids in the creation of your sales and marketing plans. You may make your marketing and sales initiatives more effective by anticipating consumer demand for your goods and services. Additionally, you may improve client retention and loyalty while raising sales income and profitability.

What is the Role of Demand Forecasting in Supply Chain Management?

Demand forecasting is necessary for supply chain management since it links the many supply chain stages. By synchronizing and coordinating your supply chain activities with consumer demand through demand forecasting, you can ensure that you give customers the right products or services at the right time.

You may increase the effectiveness and performance of your supply chain by using demand forecasting to:

  • Align your supply chain goals with your corporate objectives.
  • Identify and reduce possible risks and uncertainties in your supply chain 
  • Monitor and assess your supply chain performance and results
  • Implement continuous improvement initiatives in your supply chain

How to Broaden Your Knowledge in Demand Forecasting?

If you want to broaden your knowledge in demand forecasting, there are several ways you can do so. Here are some of the options you can consider:

  • Enroll in an online course or program on demand forecasting. Many online courses or programs offer comprehensive and practical training on demand forecasting. You can learn from experts in the field, access relevant and updated content, and interact with other learners from different backgrounds and industries.
  • Read books or articles on demand forecasting. Many books or articles provide valuable insights and tips on demand forecasting. You can find them in libraries, bookstores, or online platforms. You can subscribe to newsletters or blogs covering demand forecasting topics.
  • Join a professional network or community on demand forecasting. Many professional networks or communities focus on demand forecasting. You can join them online or offline, depending on your preference. You can benefit from networking with other professionals in the field, sharing best practices and experiences, and getting feedback and support.

The Final Words

Demand forecasting is essential to supply chain management because it enables you to match your supply chain’s operations with consumer demand. You can manage distribution and logistics, plan production and procurement, optimize inventory levels, and create marketing and sales plans with the aid of demand forecasting. Increase your abilities and capabilities in this area, career possibilities, and opportunities by expanding your understanding of demand forecasting.

In partnership with CEC, IIT Roorkee, and other industry leaders, Imarticus Learning offers Professional Certification in Supply Chain Management and Analytics to individuals looking to work in the operations and supply chain sector. 

Prepare yourself for a rewarding supply chain management and analytics career by getting hands-on experience with 6 real-world projects designed to give you a thorough understanding of the sector.

 You may learn crucial supply chain knowledge and analytical abilities through this cutting-edge curriculum created by CEC and IIT Roorkee. This supply chain analytics course will teach you how to use Python to become more data-driven and make better supply chain choices.

How are current trends re-designing supply chain management?

Posted on by Imarticus Learning

Traditional supply chain techniques are trembling in their boxes in the age of Amazon Prime speeds and same-day delivery. The way we handle supply chains is changing due to current developments, therefore out with the outdated and in with the innovative. We’re talking about a future in which an autonomous delivery vehicle can take your morning coffee to your doorway after a robot barista has made it. 

In this world, where machine learning algorithms anticipate your preferences before you ever click “buy,” sustainability is more than just a trendy phrase; it is ingrained in the very fabric of the supply chain. 

The future of designing the supply chain will receive a major shake-up with various innovations poised to revolutionize how we procure, vend, and network. A technology-driven shift that will reinvent the fundamental notion of supply chain management is underway and spans machine learning to blockchain, automation to the Internet of Things. 

We’re diving deeply into the thrilling currents that are completely re-designing supply chain management in the modern era as we know it, from the technologies that are elevating warehousing to the next level to the algorithms that are converting mountains of data into strategic gold. 

Prepare to discover, be fascinated, and be inspired as you learn how these trends are changing the face of business. Welcome to the supply chain journey, which starts here at the nexus of technology, effectiveness, and a dash of magic.

Why is supply chain management being re-designed due to current trends?

Supply chain management (SCM) is a critical component of businesses worldwide, ensuring the efficient flow of goods and services from suppliers to end consumers. The global market continues to evolve. The SCM industry is also experiencing significant changes. 

The worldwide supply network is flourishing. It was evaluated at $21 billion in 2022; through 2030, it is anticipated to rise by 11.1% year. The need for SCM solutions, which may assist companies in bettering their planning, forecasting, inventory management, and other supply chain activities, is causing this increase.

Modern digital technology has been incorporated into digital supply chain management to make it feel like a supercharged version of traditional supply chain management. Imagine predictive analytics performing their magic to optimize inventory distribution and anticipate demand trends. 

To ensure that supplies never run out, picture automatic replenishment systems flying in to rescue the day. And there’s still more! Prepare for the coming of robotics, which will replace conventional picking or assembly methods by moving quickly. It’s time to reinvent supply chain management in light of the digital revolution.

Key trends driving the transformation of supply chain management

The digital revolution has profoundly impacted SCM, bringing forth new opportunities for efficiency and optimization. Technologies like artificial intelligence (AI), big data analytics, and cloud computing have made real-time tracking and visibility across the supply chain feasible.

Businesses may collect a lot of data and get insightful information to help them make better decisions, increase forecasting accuracy, and manage their inventories more effectively.

  • Launch of the Digital Symphony: The digital transformation is centered on a stage set with displays, algorithms, and the hum of servers. It involves arranging a symphony of invention rather than merely focusing on bits and bytes.
  • Connecting to Possibilities: Consider technology as a doorway to limitless options. Plugging in means energizing your processes, from data analysis that unlocks secrets to automation that eliminates inefficiencies.
  • The Magic Elixir data: Data is more than information; it catalyzes change. The crystal ball makes patterns visible, foretells trends, and whispers insights that inform choices.

Watch as conventional approaches and cutting-edge solutions dance together in the techno-tango. It’s a dance in which manual jobs embrace the beauty of AI while outdated systems waltz with cloud-based miracles. Robots are the foot soldiers of development, not the stuff of science fiction. These mechanical wonders collaborate with people in factories and warehouses to increase speed and accuracy.

Security in this digital age isn’t just a concern; it’s a shield that keeps you safe. Transparency is spelled out by blockchain, while cybersecurity protects against the shadowy practices of data breaches. Imagine delivery drones flying through the air and self-driving cars traversing the streets. This is logistics levitation. With the help of technology, logistics takes off, transforming excursions into efficient expeditions.

Supply Chain Collaboration: Breaking Down Silos for Seamless Integration

 

Traditional supply chains often function in silos, with limited stakeholder collaboration and communication. The current emphasis is on the value of seamless integration between retailers, manufacturers, distributors, and suppliers. 

Real-time communication is made easier by collaboration tools and platforms, allowing participants to exchange information, plan their strategies, and act rapidly in the event of changes or interruptions.

The supply chain is a vast network of connected businesses transporting products from suppliers to customers. But far too frequently, each firm runs independently, with its aims and purposes. Inefficiencies lost opportunities, and even interruptions may result from this.

Collaboration throughout the supply chain can help with that. Businesses may build a more fluid and effective supply chain by cooperating and removing organizational barriers. This may result in more visibility, lower expenses, and quicker delivery times.

But how can you eliminate silos and foster a collaborative culture? 

  • Start at the top. 

The tone for collaboration must be established by senior leadership. They must foster an environment where knowledge exchange is comfortable for everyone.

  • Assemble multidisciplinary teams. 

Assemble staff from various departments to collaborate on initiatives. They can better comprehend one another’s wants and difficulties due to this.

  • Employ technology. 

Numerous software programs exist that can facilitate more efficient company collaboration. These solutions can aid in information sharing, progress monitoring, and decision-making.

  • Celebrate achievements. 

It’s critical to recognize and appreciate corporate collaborations that result in success. People will be encouraged to keep cooperating as a result of this.

It is difficult to eliminate silos and foster a collaborative atmosphere. However, it’s crucial for companies who want to build a supply chain that is more effective and efficient.

Sustainable and Ethical Practices: Meeting Consumer Expectations

With the rise of social and environmental consciousness, consumers now expect businesses to prioritize sustainability and ethical practices. This trend influences SCM, as companies must consider responsible sourcing, eco-friendly packaging, and reducing carbon emissions in transportation. Supply chain professionals are exploring renewable energy sources, optimizing transportation routes, and embracing circular economy principles to minimize waste and environmental impact.

To mitigate risks and ensure business continuity, companies invest in risk management strategies and build resilient supply chains. This includes diversifying suppliers, mapping alternative transportation routes, and implementing robust contingency plans to adapt to unforeseen circumstances quickly.

Opportunities and Challenges Due to Drastic Changes in Supply Chain Management

Opportunities:

  • Enhanced Efficiency and Cost Optimization: Embracing technological advancements and collaborative practices allows businesses to streamline operations, reduce costs, and eliminate inefficiencies.
  • Improved Customer Experience: Real-time visibility and accurate forecasting enable businesses to meet customer demand promptly and deliver an enhanced consumer experience.
  • Competitive Advantage: By efficiently managing the supply chain and embracing sustainability practices, companies can differentiate themselves from competitors and attract loyal customers.

Challenges:

  • Technological Integration: Adopting new technologies may require significant investment and expertise. Ensuring seamless integration and overcoming resistance to change can be challenging for some organizations.
  • Data Security and Privacy: The increased reliance on digital systems and data sharing poses risks related to cybersecurity and privacy. Companies must implement strict protocols and measures to protect sensitive information.
  • Complexity and Globalization: As supply chains become more complex and global, managing international suppliers, regulations, cultural differences, and geopolitical risks can prove challenging.

The Final Words

The current trends in re-designing supply chain management are reshaping the industry and presenting opportunities and challenges. Embracing technology, fostering collaboration, adopting sustainable practices, and prioritizing risk management is key to successfully navigating these changes.

By leveraging digital transformation, businesses gain data-driven insights and enhance operational efficiency. Collaboration and seamless integration break down silos, ensuring effective stakeholder communication and coordination. Sustainable and ethical practices meet consumer expectations, help protect the environment, and build a brand reputation. Meanwhile, effective risk management strategies enable businesses to address unforeseen challenges and maintain business continuity proactively.

While these trends offer exciting new possibilities, organizations must also address challenges related to technological integration, data security, and the complexity of global supply chains. Companies may maximize the benefits of re-designed supply chain management and maintain competitiveness in a constantly changing market by proactively tackling these difficulties.

Imarticus Learning Professional Certification in Supply Chain Management and Analytics is a state-of-the-art supply chain management course that was created in collaboration with CEC, IIT Roorkee, and industry leaders to give candidates looking to enter the operations and supply chain industry a thorough and industry-relevant learning experience.

5 Key Supply Chain Management Strategies Used in Businesses

Posted on by Imarticus Learning

Do you have trouble incorporating supply chain management into your daily operations?

Or do you wish to increase the effectiveness of your current supply chain process? 

Managing your supply chain is more crucial than ever in today’s fast-paced, multinational world. 

The APICS Dictionary, 14th Edition, states that a company’s strategy determines how it will operate in its environment. The strategy outlines how to serve consumers, expand the business, compete in its industry, manage the organization, build skills inside the company, and meet financial goals. The survey’s findings have a 95 percent confidence level and an estimated 5 percent margin of error. 

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In this blog, we’ll talk about the top 5 supply chain management techniques companies utilize. You may enhance your bottom line by streamlining your supply chain process and implementing these tactics, from improving logistics to adopting cutting-edge technology. 

What is supply chain management, and why is it important?

The planning, organizing, and execution of the movement of goods, services, data, and money from the supplier of raw materials to the final consumer is known as supply chain management (SCM). SCM encompasses various tasks, including sourcing, purchasing, production, inventory control, transportation, distribution, etc.

Supply chain optimization approaches are significant because they impact any business’s effectiveness, quality, cost, and sustainability. A properly managed supply chain may give a company a competitive advantage, save expenses, boost customer happiness, and boost profitability. A poorly run supply chain, on the other hand, might result in delays, mistakes, waste, and consumer complaints.

What are the top supply chain management strategies used in businesses?

5 Key supply chain management techniques for Success

Now that you know what SCM is and why it matters, let’s look at some key strategies that successful businesses use to manage their supply chains effectively.

  • Support your supply chain with your business goals.

The first and most important strategy is to align your supply chain with your goals. You must understand your customers’ needs and expectations, market conditions and opportunities, core competencies and capabilities, and financial objectives. Then you need to design your supply chain accordingly to support these goals.

For example, your goal is to offer fast and reliable delivery to your customers. In that case, you need to have a responsive and agile supply chain that can quickly adapt to changes in demand and supply. To offer your customers low-cost products, you need an efficient and lean supply chain to eliminate waste and optimize resources.

  • Implement lean principles

Lean principles are based on eliminating waste and maximizing value in any process. Waste can be anything that does not add value to the customer or the business, such as defects, overproduction, waiting time, excess inventory, unnecessary motion, transportation, or processing.

  • Leverage technology

Technology is a great enabler of supply chain management. It can help you automate tasks, streamline processes, enhance visibility, improve communication, increase accuracy, reduce errors, and generate insights. 

Technology integration into supply chain operations is now more common practice than an exception. Platforms like ERPs and SAPs are wonderful tools for streamlining operations, improving visibility, reducing paperwork, and automating particular tasks. 

Transportation cost and management systems are perfect for your supply chain’s overall image since they increase productivity while reducing risk. They furthermore provide data-driven perspectives on commercial choices. You need a strong foundation to streamline supply chain management and support your company’s strategy. Technology centers around making a business more lucrative and open.

  • Centralized contract management

Centralizing contracts along the supply chain may be advantageous for contract management. When contracts are spread across numerous departments, such as finance, legal, buying, and operations, it is simple to forget crucial elements or lose whole contracts. 

Contract signing, upkeep, and amendment processes are streamlined and made more effective. By taking advantage of the company’s whole service spending, executives of the supply chain division may also better control risk, which leads to larger savings and lower prices.

  • Monitor and set risk levels.

Finding risk factors across the supply chain helps make your procedures more flexible and prepared to handle any issues that may develop. The decision-making process for sourcing is one of the most crucial locations to search for risk; as many external factors as possible may influence it. 

Adopt approaches that can help you see hazards through the sourcing process. Blockchain technology in supply chain management refers to utilizing blockchain, a decentralized and transparent digital ledger, to enhance and streamline various processes within the supply chain.

  • Analyze the chances of a risk happening and its effects.
  • Consider the financial and operational expenses that would arise if a risk occurred.
  • To assess their relevance and how frequently they should be reviewed, risks should be rated or appraised.

The Final Words

As we conclude the five main supply chain management techniques organizations employ, remember that supply chain management is more than just a trendy term; it is an essential component of Success in today’s cutthroat marketplace. Implementing these techniques may unleash the supply chain’s latent potential and lead your company to greater productivity, cost savings, and client happiness.

A strategic chief operational officer-focused executive certificate program was developed with IIM Raipur and Imarticus Learning. You will graduate from this 10-month program with the fundamental technological, interpersonal, operational, and strategic abilities needed to lead the next generation of strategic chief operating officers. 

The supply chain analytics course provides over 150 hours of interactive sessions, which IIM Raipur’s knowledgeable professors administer. You will develop the requisite skills in this important field and put yourself in a position to advance to C-suite positions by completing this certification program.

So, take time to assess your current supply chain process and pinpoint areas that might be improved. To advance your company, harness the power of teamwork, use data analytics, and make the appropriate technological investments. Remember that supply chain management is a journey toward continual improvement rather than a destination.

What can I do with a supply chain management degree?

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In the dynamically transforming world of commerce, a career in supply chain management offers an exciting blend of strategic problem-solving, analytical skills, and management prowess. Graduates from a supply chain management course find themselves at the crossroads of an intricate global network, managing a wide array of activities from procurement to logistics, thereby making tangible impacts on the businesses they work with.

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With the burgeoning complexity of international commerce, supply chain management has emerged as a crucial field, accelerating demand for skilled professionals. With a degree in supply chain management, one can navigate through this industry, sculpting an intriguing and rewarding career in logistics and supply chain management.

The Evolution of Supply Chain Management: A Historical Perspective

Understanding the evolution of supply chain management helps appreciate the complexity and importance of the field today. 

The early 20th century saw the core focus on production. With that, companies aimed at enhancing manufacturing efficiency. This era was characterised by mass-production models, as exemplified by Henry Ford’s assembly line. During this period, supply chain activities were largely fragmented, and logistics was viewed as a necessary but non-strategic expense.

Post World War II, there was a shift towards a market orientation, where understanding customer needs and providing value became the focal point. Businesses started recognising the significance of managing distribution and logistics to meet customer demands effectively. Still, the overall supply chain perspective remained functionally siloed, with each department focusing on optimising its operations without much regard for the broader system.

The late 20th century heralded a new era with the advent of Information Technology. Companies began to see their supply chains as an integrated process, where coordination across different functions was key to achieving overall efficiency. Alongside this, various waste reduction and continuous improvement strategies like JIT (Just in Time) and TQM (Total Quality Management) also took birth.

With the dawn of the 21st century, the supply chain management field witnessed exponential growth in its complexity and strategic importance. Globalisation led to lengthier and more intricate supply chains, demanding better coordination and visibility across all levels. While we were adjusting to the new normal, e-commerce giants like Amazon emerged, completely revolutionising consumer expectations from businesses. The newfound appetite for speedy, affordable, and efficient delivery has skyrocketed, exerting considerable pressure on companies to meet these amplified demands.

The freshest shift in supply chain management is deeply connected to the arrival of advanced digital technologies like AI, machine learning, big data, and blockchain. This surge of technological advancements has sparked the beginning of an exciting new journey in the realm of supply chain management, unfolding an array of promising prospects for the times ahead.

Charting Your Career Path

A supply chain management degree unlocks a multitude of potential career paths, each with unique roles and responsibilities. You might find yourself stepping into the shoes of a Supply Chain Analyst. 

In this role, you’d immerse yourself in the meticulous review and enhancement of supply chain processes, skillfully using quantitative data as your compass to guide insights and shape strategic decisions. Alternatively, you could take on the mantle of a Logistics Manager or Operations Manager. These roles place you at the heart of daily supply chain operations, where your responsibility lies in maintaining the smooth running of operations and ensuring efficient and timely deliveries, all while keeping a vigilant eye on cost management.

If strategic roles interest you, you might gravitate towards becoming a Supply Chain Consultant or a Supply Chain Manager. These roles involve a strategic overview of supply chain processes, optimising performance, reducing costs, and ultimately driving value for businesses. 

As your experience grows, you could even work your way up to become a Director or Vice President of Supply Chain Management, playing a pivotal role in shaping a company’s direction and success.

Leveraging the Right Course

Taking the right supply chain management course is crucial in developing the necessary skills and knowledge to excel in this industry. A well-structured course provides both the theoretical and practical grounding required to navigate the dynamic landscape of supply chain management.

One course that stands out is the Professional Certification in Supply Chain Management and Analytics by IIT Roorkee, offered in collaboration with Imarticus Learning. This globally recognised certification offers a comprehensive curriculum, expert-led teaching, and real-world industry projects, providing a holistic and impactful learning experience.

Building a Future in Logistics and Supply Chain Management

A career in logistics and supply chain management promises diversity and exciting challenges. With roles spanning across industries like retail, manufacturing, healthcare, and technology, a degree in supply chain management could lead you anywhere in the world.

As businesses increasingly prioritise sustainable practices, there is a rising demand for supply chain professionals capable of creating and implementing green logistics strategies. This presents opportunities to influence companies’ environmental footprints while driving cost savings and efficiency.

Conversely, with the surging emphasis on digital transformation, an array of roles dedicated to the management and application of advanced technologies in supply chain management is becoming increasingly prevalent. These technologies, encompassing AI, machine learning, and blockchain, create a rich confluence of technology and supply chain management, paving the way for innovation and revolutionary change.

In conclusion, possessing a degree in supply chain management is akin to holding a versatile key capable of unlocking a myriad of career opportunities. Opting for a globally recognised course like the one offered by IIT Roorkee ensures you are well-armed with the necessary skills and insights to flourish in this ever-changing field. 

Setting off on a career journey in supply chain management offers not only a diverse range of challenges to conquer but also a chance to make a significant contribution to the global economy.

7 Metrics to Measure Supply Chain Performance

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Measuring supply chain performance is crucial for every business organisation as it helps identify areas of improvement, optimise efficiency and enhance overall productivity. In order to achieve the same, various industries deploy multiple metrics and key performance indicators. Such include perfect order index, supply chain cycle time, and inventory turnover, among others. 

With that being said, here is a detailed article highlighting the seven most effective metrics to help evaluate your supply chain performance. 

Inventory Turnover

Simply put, inventory turnover refers to the total number of times your entire inventory has been sold during a specific period of time. The formula for the same goes as follows,

Inventory turnover = Cost of goods sold/ Average inventory.

It is a key metric that helps to assess how efficiently an organisation manages its inventory. For example, a high inventory turnover rate signifies that inventory is sold quickly with minimal excess stock. Simultaneously, a low inventory turnover rate indicates weak sales performance and inefficiencies in the supply chain process. However, inventory turnover benchmarks usually vary across different industries. 

By keeping track of this inventory turnover rate, organisations can identify potential issues in their inventory management, optimise stock levels and improve the overall efficiency of the entire supply chain process.

Perfect Order Index

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Perfect Order Index is another key metric used to assess the error-free rate of the entire supply chain design. It is a composite metric, meaning it takes into account various factors such as on-time delivery, complete shipment, error-free documentation, and accurate product selection, among others. To calculate the Perfect Order Index (POI), we use the below-mentioned formula,

POI= (Number of Perfect Orders/Total Number of Orders)* 100

The higher the POI, the greater the number of orders that have been fulfilled accurately and completely, leaving no room for any form of error. By using this metric, business organisations can identify all the weaknesses in their supply chain processes and take the necessary action to rectify them.

Cash To Cash Time

Cash-to-cash time, also referred to as C2C, is another key metric deployed by various organisations to measure supply chain performance. It represents the time utilised by a company to convert its investments in inventory and other inputs into cash flow from sales. It primarily comprises three supply chain measurements, namely,

  • Days of inventory
  • Days of payables and 
  • Days of receivables

A shorter C2C time indicates an efficient supply chain performance, meaning that companies can quickly turn their investments into cash, leading to improved liquidity and financial stability. Contrarily, a greater C2C time reflects inefficiencies in inventory management, payment collection, and supplier retention. 

Fill Rate

Fill rate signifies the actual percentage of customer demand that any business organisation can fulfil from its available inventory without any backorders or stockouts. Reviewing this metric regularly helps companies to measure their supply chain performance, specifically in terms of order fulfilment. 

Let’s explore a small example of how we can calculate the fill rate.

Say, a company has received a total number of 100 orders, out of which it has been able to fulfil 95 orders without any backorders. Then the fill rate would be,

Fill Rate (%) = (95/100) *100 = 95%.

Gross Margin Return On Investment 

Gross Margin Return On Investment, commonly referred to as GMROI, enables businesses to evaluate the profitability of their inventory investments and assess the efficiency of their inventory management practices. In order to calculate GMROI, we use the following formula,

GMROI = (Gross Margin/Average Inventory Cost) * 100

Here, Gross Margin refers to the difference between the total sales revenue and the Cost of goods sold. On the other hand, Average Inventory Cost is the average value of inventory held, during a specific duration of time, such as a month or a quarter.

Warehousing Costs

Warehousing, as we all know, is by far one of the most important components of the whole supply chain process. Therefore, monitoring the Cost of the same is equally essential as it helps to provide valuable insights related to cost optimisation and process improvement. While calculating warehousing costs to measure supply chain performance, we take into consideration multiple factors, such as, 

  • Labour Costs
  • Inventory Holding Costs
  • Material Handling Costs
  • Transportation Costs and
  • Utility Costs, among others.

By thoroughly scrutinising the warehousing costs, enterprises can make data-driven decisions to streamline all their operations while simultaneously reducing costs and enhancing the overall supply chain performance.

Customer Order Cycle Time

Customer order cycle time, as the name suggests, refers to the total time taken from when a customer first places their order to the moment the order gets delivered to the customer’s doorsteps. It serves as a crucial metric for measuring supply chain performance, as it is directly related to customer satisfaction and loyalty. 

A shorter customer order cycle time can enhance a business’s overall competitiveness, resulting in increased customer retention and loyalty. In addition to this, it also plays a crucial role in identifying any bottlenecks or inefficiencies in the supply chain process.

Conclusion

Ensuring an efficient supply chain performance is important for every business, regardless of the industry type. It not only helps to enhance operational efficiency but is also effective in reducing costs and driving the overall success of a business, especially in today’s dynamic and competitive marketplace. To achieve the same, you can refer to the above-mentioned seven metrics that help to fully understand the supply chain performance of your business. 

Additionally, if you wish to gain more insight into managing the supply chain process or if you want to pursue any C-suite roles related to this industry, you can refer to various supply chain analytics course available online.

One such includes the Executive Certificate Programme for Strategic Chief Operating Officers, offered by Imarticus in collaboration with IIM Raipur.

It is a comprehensive 10-month supply chain management program specifically designed for candidates who wish to upskill their strategic, operational, and technical skills related to this field.

Components of Supply Chain Management

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The term ‘supply chain management’ first came into the picture in 1982, when Keith Oliver coined it. However, supply chain management has existed in practice long before that. The only way to successfully sell large quantities involves efficient supply chain management. 

With modern technology, AI, and various software tools, business owners find managing their supply chains increasingly simpler. Nevertheless, one must be aware of the different components of supply chain management in order to simplify and streamline their supply chain operations.

Let us dive into the world of supply chain and dissect each component of the supply chain to understand its functioning. 

Understanding Supply Chain Management: Definition and Objectives

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Essentially, supply chain management refers to the handling of all the processes involved in transforming raw materials into finished products and, subsequently, selling them. Supply chain management impacts other facets of businesses, such as financial management, operating costs, customer satisfaction, and more. 

The key objectives of supply chain management are: 

  • Improving efficiency
  • Optimising logistics
  • Improving customer satisfaction
  • Cutting down unnecessary costs
  • Improving distribution
  • Co-ordinating the overall business

Six Components of Supply Chain Management

While there are several different models of supply chain management, the most common one is the Supply Chain Operations Reference or SCOR model. This model has six components that are as follows:

  • Planning: The first and most crucial component in supply chain management is planning. One of the first things an entrepreneur would need to plan is how to make their product, domestically or internationally. Furthermore, this is also the time to decide whether you want to make each part of your product yourself or whether it would be more sensible to purchase some components from a third party. 

Additionally, planning will also require you to decide how you will produce and store your products. This means you should have a clear layout of whether you want to make and store your products beforehand or make them as you get orders. 

  • Sourcing: Once you are done planning, you will be moving on to the sourcing phase of your supply chain management. This is where business owners should reach out to potential vendors, verify the quality of raw materials, get the best-quoted price possible, and subsequently buy them. It is also essential to ensure all your raw materials are delivered on time. 

In addition, remember to assess and vet your suppliers continually for optimal supply chain management operations. 

  • Location: Location plays a very critical role in supply chain management. For example, if you own a beverage company, your manufacturing plant should not be established in a location with water scarcity. Therefore, set up your manufacturing unit based on the needs and requirements of your raw materials and finished products. 
  • Making: Once the previous three steps are fulfilled correctly, you will move on to making your goods. This stage involves assembling, testing, and packing of finished products. You can incorporate customer feedback at this stage to ensure your products are up to the mark. 
  • Delivering: Now, we enter into the logistics part of supply chain management. Apart from ensuring your goods reach your customers, this phase also involves processing orders, warehousing, and inventory management. A major part of the success of a company depends on this stage, and hence, you should put special efforts into ensuring a smooth delivery process. 

Some of the best delivery practices include automated inventory management, large warehousing networks, delivery fulfilment using air, sea, and road, and so on. 

  • Returns: While returns may seem to have a negative impact on your business, in reality, how you handle your returns and improve your products based on that will attract more buyers to your company. Therefore, make sure to create a simple and easy returns process that does not feel like a hassle to your buyers. 

Furthermore, you should have efficient reverse logistics in place to ensure your goods are picked up on time and returned to your warehouse for further inspection or processing. Other elements of the returns process are:

  • Identifying the condition of the returned product
  • Authorising the return
  • Scheduling a replacement
  • Processing refunds

Importance of Understanding Supply Chain Management for Growth

Needless to say, supply chain management is one of the most important aspects of businesses that help entrepreneurs to scale up while saving costs and offering high-standard services and products. Even though supply chain management might sound simple, it has a ton of intricacies, all of which need to be taken care of in order to get the best results. 

In this regard, we recommend enrolling in the IIT Supply Chain Management Course, taught by esteemed faculty members at IIT Roorkee and offered by Imarticus. 

This online course covers all the basics in addition to the components of supply chain management. Furthermore, you will also be able to learn coding languages and software tools like Python, Excel, and Tora. At the end of the course, you will get a certification from IIT Roorkee, which will further boost your portfolio and help you better manage your own business supply chain operations or establish yourself as an expert in this field. 

Artificial Intelligence (AI) in Demand Forecasting

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Utilising Artificial Intelligence and machine learning helps us make better probability analyses and thus helps businesses to accurately foretell how much the goods might cost in the sales and operations planning accordingly by studying the seasonal fluctuations. 

We get to see the increasing use of AI in demand forecasting. This helps significantly reduce the percentage of errors that they commit in the networks of the supply chain and makes the entire process much more efficient in saving time. 

What do we understand by Demand Forecasting?

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Demand forecasting refers to the assessment of the various processes of a company that helps forecast the value of multiple products in the future supply chain. Doing this entire process manually is a pretty hectic job. This process is made more efficient by utilising Artificial Intelligence.

Demand forecasting helps in optimising the inventory of a business by forecasting the supply demand of the products in the future. This process includes analysing all the records of sales data.

What are the characteristics of Demand Forecasting?

There are several benefits of Demand Forecasting. These are listed as follows:

  • Demand Forecasting significantly cuts down the percentage of risk by making economic financial decisions. This in turn helps in managing cash flow, resource allocation, profit margins and many more. Overall it helps in preparing the budget of the company
  • Demand Forecasting helps in forecasting the demands of the customer and helps in aligning the production rate according to the demand rate and hence avoiding overflooding of inventory. 
  • Demand Forecasting manages the dynamic pricing of the products based on the consumers’ demand. It carefully studies the market and reads for potential opportunities which can help companies proliferate by incorporating the right marketing tactics. 

What are the various types of Demand Forecasting techniques?

The various types of Demand Forecasting techniques are as follows:

  • Macro-level forecasting: This only considers the broader external factors affecting the business and helps keep aware of the opportunities centring the expansion of the portfolio and other things.
  • Micro-level forecasting: This type of forecasting generally focuses on a specific industry or business
  • Short-term forecasting: This involves forecasting that involves a time span of almost 12 months. 
  • Long-term forecasting: This type of forecasting involves a time span of more than a year. Doing so, it analyses the seasonal demands by studying the annual patterns and the potential of production and expansion covering a long period. This helps in strategising long-term business plans.

What are the various advantages of using AI-based Demand Forecasting?

The various advantages of AI-based Demand Forecasting are as follows:

  • AI-driven forecasting is time efficient: There is a big time constraint while working on demand forecasting manually. AI-driven forecasting on the other hand is quite fast. Saving time for critical analysis, the primary data are efficiently arranged and analysed in no time. 
  • Accuracy at forecasting: As it has been mentioned earlier, making informed decisions is greatly aided by the accurate forecasting driven by AI. What gives AI an even better edge over manual forecasting is that the information is continually updated which makes the information that it provides so accurate. The rise in accuracy in forecasting is found to be directly proportional to the rise in sales.  
  • Coherence between external and internal data: The AI-generated data follows a close look out for seasonal variations and fluctuations in the external data. It specifically studies the demand patterns and then accordingly aligns the sales forecasting. Manually maintaining coherence between this external and internal data would have been quite difficult and prone to errors.  
  • Battling rapid fluctuations: In the case of events which is often commonly called the Black Swan events, the sales are heavily hampered. To cope with such a downfall of sales due to failure of predictions and immediate follow-up with good planning, AI models provide a solution by giving prompt analysis with appropriate planning that follows the analysis. This helps tide over such trying times. 
  • Early predictions: One of the biggest benefits of using AI-generated forecasting over manual forecasting is that AI can foretell fluctuations beforehand and makes room for appropriate adjustments and arrangements by laying out the future steps to be taken for the supply chain design.

Conclusion

In this article, we got to learn about demand forecasting and how the integration of AI helped make the entire process more efficient. Secondly, we got to know that AI-driven forecasting is much more accurate than manual forecasting. Moreover, AI ensures sound coherence between the external and internal data and keeps a continuous check on the rise and fall of demand rate in the market controlling tightly the flow of the sales. 

Check out Professional Certification in Supply Chain Management & Analytics provided by Imarticus if you want to give a boost to your career in this field. This supply chain analytics course is provided in collaboration with IIT Roorkee. One needs to have basic knowledge of programming and operations management to be eligible to enrol in this course.