4 Challenges of Demand Management

As technology continues to advance, it will also continue to shift towards the consumer. The main reason is because the consumer has a natural desire to get what they want, from where they want, and when they want. For businesses and demand management to fulfill these wants they need to recognize and resolve all challenges they may face in their supply chain.

To stay competitive the business also needs to educate their selves surrounding the challenges so they can continue to recognize them and deal with them in the future. To help with this we have listed 4 challenges of demand management that a business must recognize.

Demand management is the process of monitoring, analyzing, and predicting customer demand for a company’s products or services and then planning and executing supply chain activities to meet that demand. 

4 challenges of demand management:

• 1. Ensuring that there is enough stock to meet customer demand can be a challenge for 3PL logistics companies.
• 2. Making sure that 3PLs have the right mix of products and services to meet customer needs can be difficult.
• 3. Deciding which 3PL services to offer customers can be tricky.
• 4. 3PLs need to be careful not to over-promise and under-deliver on their services.

Lead Times Are Long and Risky

There can be a high price to pay if your business works with both foreign labor and cheap labor. The main cause is the amount of time it takes for a shipment to arrive. Not only that but a lot of unexpected problems could occur during the 50 days of travel at sea. Also, it is kind of hard to cancel an order as it sits in the middle of an ocean on a cargo ship. Problem’s at sea can instantly double delivery dates if the cargo is lost, stolen by pirates or if
the receiving port has labor strikes. Every demand management business dreads disappointing their customers and explaining why there are delays. No matter how small the delay is it can still cause a big havoc in your supply chain.

Increasing business complexity

With many companies needing to be complex this might become the only way to remain competitive. To compete successfully many companies have relocated their manufacturing overseas. This way they have a reduced amount of labor costs. This seems to be the norm today for businesses to be able to manage their complex supply chain across various locations and time zones.

Cutting Costs

If your business plans to utilize a leaner model for distribution and manufacturing make sure that it does not happen at the expense of quality or productivity. Also remember to not overemphasize your cost cutting because it can be detrimental to a successful supply chain. A good example of this is the hindrance it can cause as you try to adjust to the supply and demand without worrying about losses.

No Strategy for Risk Management

Every demand management company is familiar with taking risks. But, what some companies fail at is how to manage that risk once something goes wrong. Risk is unavoidable but only if you have no strategy for risk management. What you need to keep in mind about supply chain management is becoming familiar with it. That way it’ll align perfectly with other aspects of your business.

Take control of your freight with an Asset-Based 3PL Logistics Trucking Company that can assure you transparency from the port to your destination nationwide, request a free quote today and discover your asset-based logistics solution.