Consumer demand for items does not stay consistent throughout the year. There are seasonal fluctuations in consumer demand for a variety of reasons, such as holidays, weather, cultural traditions, fashion trends, and lifestyle changes. Retail businesses and manufacturers must learn to understand and manage these seasonal demand changes to ensure they can continue to satisfy consumer demand during each season of the year.
The primary objective of your business needs to be preparing your supply chain for seasonal demand fluctuations. Since the supply chain is responsible for bringing more stock into your inventory, you must have enough stock available to satisfy the high-demand items and not the low-demand items. If you can learn to do that, you will maximise your profits and reduce your losses during these seasonal changes.
Below are the top 5 strategies that businesses can use to better adapt to the seasonal demand changes.
1) Acquire or Update Your Inventory Management Software
The first thing you need to do is obtain the latest inventory management software app for your company. Inventory management software can synchronise inventory data with other software programs and let you monitor the number of products in your inventory in real-time.
For instance, the Cin7 Inventory Management Software is the industry leader in managing inventory for small and medium-sized businesses. It is a cloud-based inventory management system that gives you greater visibility of your inventory and sends you automated alerts when certain products run low.
The best part is that Cin7 can submit automated order requests to suppliers of the supply chain to produce and send more products back to your business to refill your inventory. That way, you will receive the products before you run out of them, which allows you to continue satisfying consumer demand as it fluctuates during each season.
2) Diversify Suppliers
You should stop depending on a few suppliers to provide your business with its inventory. Otherwise, they will eventually disappoint you when they run out of supply or cannot fulfil your order requests to replenish your inventory. Where will your business be in this situation?
For this reason, your company needs to diversify its suppliers by forming more business relationships with several different suppliers. Having multiple suppliers on standby will help ensure that you can refill your inventory if it starts running out of certain high-demand products. It also gives you more flexibility to negotiate prices with suppliers and provides backup options in case some suppliers fail to adapt to the demand changes along with your company.
As a result, your business can continue to satisfy the high demand of its consumers without the risk of disappointing them and losing the potential profits that could bring to your company.
3) Use Demand Forecasting Tools
Cin7 inventory management software has sophisticated demand forecasting tools to help you analyse and predict seasonal consumer trends. It lets you review historical sales data from past seasons to help predict future consumer trends for upcoming seasons. The forecasting models are highly accurate since they can utilise past data from different weeks, months, quarters, and years to make sales demand predictions.
You have the option to forecast the sales demand for specific products, groups of products, or all the products in your inventory. For example, if you want to predict the sales demand for clothing products only, you would filter your forecast for the “Apparel” category. It all depends on your company and its product line.
Of course, it helps to forecast the sales demand of all your products so that you can see which ones have less demand from consumers. This information will help prevent you from flooding your inventory with low-demand products that you cannot sell. Instead, you will fill your inventory with high-demand products that sell quickly, which reduces waste and increases revenue.
4) Obtain More Temporary Workers and Warehousing
Seasonal demand fluctuations will require you to store more products in inventory and hire more workers to manage them. To ensure you have enough space and workforce available to handle this higher seasonal demand, you need to obtain more temporary warehousing and hire more temporary workers to sustain it.
Temporary warehousing will supply you with the space needed to store your higher inventory levels. As for the temporary workers, they can include truck drivers, delivery drivers, dock workers, warehouse workers, and anyone else in the supply chain that you depend on to move inventory from one place to another.
Another thing you can do is outsource to third-party logistics (3PL) companies to fulfil your orders externally. 3PL companies let you expand your warehouse operations and fulfil customer orders more quickly. Consider using the Cin7 inventory management software to connect your real-time inventory data with 3PL companies for immediate order fulfilment when needed.
5) Collaborate with All Your Supply Chain Partners and Stakeholders
Feel free to share vital supply chain information acquired from your inventory management software with all your supply chain partners, including retailers, distributors, and 3PL companies. Not only do you need to share inventory turnover and sales information with them in real time, but you also need to prepare them for what might come based on the demand forecasting data.
Keep your other stakeholders informed of your demand forecasts, too. These stakeholders would include your customers, investors, and all logistics, marketing, and sales teams that work to promote and deliver your products. Internal and external collaboration will help you create promotional plans and give your customers confidence that you will have the products they want to buy available.
Learn More
You don’t need to be alone when preparing your supply chain for seasonal demand fluctuations. Consider hiring the professional digital supply chain consultants at BlueHub to assist you with this process. The supply chain consultants can help your business integrate or update the Cin7 inventory management software and all other relevant software technologies to ensure it can keep up with the seasonal demand fluctuations.
