KAMILA MOMORA
What is the role of Demand Planning in Logistics?
Demand planning plays an important role in supply chain management. It is a process consisting of multiple steps, which allows a company or business to accurately forecast demands and trends, leading on to more efficient inventory management, more accurate revenue forecasts, and increase profitability. (Tech Target )
“Demand forecasting helps with managing inventory, ensuring that you do not order too much or too little of a particular good. The proper planning, staffing and trend forecasting can lead to a successful retail season for business owners and consumers alike.” (Load Delivered, 2014)
Key steps in demand planning include:
- Creating statistical forecasts
- Collaborating with customers
- Managing forecasts
- Supply and demand collaboration
- Confirmation with customers
- Re-examining data and adjusting planning accordingly
How Party Supply stores keep up with fluctuating demand
Party supply stores are businesses that benefit from a constant stream of demand throughout the year, with the bonus of some seasons allowing for high rates of income generation. These seasons include holiday periods such as Halloween, Christmas, New Years, Valentine’s day, St. Patrick’s day, national holidays and niche holidays. These periods are in addition to year round targeting of events like birthdays, anniversaries, and celebrations of any kind.
Party supply stores have the general party supplies in stock year round- decorations, balloons, cards, generic costumes, and all accessories such as paper cups and helium that are associated with parties and events (Bizfluent, 2017). However, during the ‘high season’ periods, party supply stores will stock everything a client could possibly need for their associated events. From early September, Halloween will begin to emerge, with party supply stores giving customers plenty of time to purchase their Halloween costumes, accessories, party décor and anything else they need. Immediately following Halloween, Christmas costumes and décor pop up, along with NYE accessories. Right after NYE, you will begin to find Valentine’s day items, followed by St. Patrick’s day, and a variety of other themed products popping up alongside the usual product offering, depending on location- such as Chinese New Years décor, Oktoberfest accessories or Mardi Gras items.
Demand is managed within party supply stores by following a calendar of events, with items being available for customers to purchase way before events occur. This of course means that the party supply store manager will be thinking about Halloween supplies in March- enough time for items to be selected, ordered, shipped to the store and arranged for customers to be able to buy from September (Chron). This is the same for each high period- not to mention a need to keep in mind all the other products that are in store year round.
Although demand for various items fluctuates throughout the year- not many people buy Christmas décor in May- it is a fairly stable demand calendar for the party supply store manager, as many events are annually repetitive, and trends, such as popular Halloween costumes, are often forecasted in advance, allowing for plenty of planning ahead. With approximately 7.4billion US dollars spent on Halloween alone in the US in 2014 (Load Delivered, 2014) this is an extremely profitable business, if planned and executed correctly, allowing for a steady stream of income throughout the year. It is also an excellent example of why demand planning is extremely vital within business logistics, and how it can make or break a company or business.
Sources
Bizfluent. (2017). How to start a party supply store . Retrieved 2017, from Bizfluent : https://bizfluent.com/how-4780692-start-party-supply-store.html
Chron. (n.d.). How to open a party supply store . Retrieved 2017, from Small Business-Chron : http://smallbusiness.chron.com/open-party-supply-store-23683.html
Load Delivered. (2014). Seasonal Supply chain: The Halloween PopUp Craze . Retrieved 2017, from https://www.loaddelivered.com/blog/seasonal-supply-chain-the-halloween-pop-up-craze/
Tech Target . (n.d.). Demand Planning. Retrieved 2017, from Tech Target: http://searcherp.techtarget.com/definition/demand-planning
Time & Date. (2017). UK Holidays 2017. Retrieved 2017, from Time & Date: https://www.timeanddate.com/holidays/uk/
Business Logistics 