AI-Supported Demand Planning Secures the Supply Chain and Minimizes Storage Costs
Demand Planning Influences Many Other Processes Such as Logistics and Financial Planning
It was in March 2021 that the fragility of global supply chains became apparent for the first time. The container ship Ever Given ran aground in the Suez Canal, blocking the waterway of global importance for six days. According to Germany Trade & Invest (GTAI), this had "created the most expensive queue in the world, with about 400 ships." Since then, there have been repeated developments that have jeopardized supply chains - be it renewed blockades of the Suez Canal or strikes by dockworkers at the Port of Hamburg and ports on the West and East Coasts of the United States.
Further complications for demand planning resulted from production shifts closer to Europe, the shortage of skilled workers, higher levels of automation in production, and the enormous growth in online trade due to the Corona pandemic - not to mention the current political situation. These uncertainties also led to the increase of buffer stocks to be prepared for delivery delays or failures.
In addition, customer behavior can change "all of the sudden" in the omnichannel world of retail, for example - sometimes forced by external circumstances such as the Covid 19 pandemic. Thus, the "run" on the Click and Collect form of distribution was also an acid test for demand planning. Not only that, but the demand for products also shifted significantly during the pandemic, keyword home office.