Recording session Blue Ridge at inNOWvate Supply Chain Event 2021

The disruptive global events of 2020 uncovered a titanic problem with the way businesses have always thought about inventory forecasting… It is way too rigid, reactive and nearsighted. The rug was pulled from under us virtually overnight, as a multitude of external factors forced most companies into fire-drill mode, versus strategic, long-term resiliency planning.

The inventory proposition looks quite different now, as businesses scramble to accommodate new and unfamiliar conditions including a 4x increase in ecommerce. Safety stock is the panic button, with widely inaccessible supply, “order online, deliver anywhere” sales channels, and store-specific operations becoming fulfillment centers. Manufacturers are now distributors; distributors are now manufacturers.

This shift in the sales channel requires businesses to augment their short-term forecasting to include longer-term visibility of expected sales and financial modeling that optimizes pricing strategies and inventory levels to outpace modern demographic, sociologic, economic, technologic, ecologic and political disruptions.

Best-in-breed Manufacturers and Distributors have done this successfully with AI-enabled technologies, like Integrated Business Planning (IBP), which enable them to look at growth as a key metric. They can quickly shift forecasts across channels by specific product groups and plan by exception for high-volume, high-growth items.

Blue Ridge shifts the philosophy – “Don’t touch anything that doesn’t need intervention”. Let system suggest what you need to sell/buy. Forecast and plan purely by exception. Trust the system. Adding advanced and integrated algorithms will help normalize forecasting/buying for approximately 50-60% of your products.

More trust in statistical models and AI, which incorporate growth rate Year-over-Year and Period-over-Period into the base model, will assist in visualizing long-term forecasting in IBP – with Supply Chain Planning (SCP) handling the short-term stable items more efficiently.

The speed/accuracy of these technologies creates an agile foundation to predict, prepare and profit from disruptive supply chain factors – with less working capital. IBP and SCP working together with Pricing Optimization reduces overall risk while opening new sales, revenue and profit streams that align to the dynamics of modern supply chains.

Missed this session?

The recording is available on the YouTube channel of Supply Chain Movement. The slide deck is available for download below.