Ensuring supply meets demand has always been a simple, yet elusive formula for businesses. Aim too high and run the risk of excess inventory sitting unused; aim too low and run the risk of costly stock-outs and unhappy consumers.
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Today, supply chain leaders are also grappling with shifting consumer preferences and new channels for consumption. While traditional planning relied on demand-shaping activities like advertising and pricing promotions, in today’s social world, an unplanned viral moment or organic influencer endorsement can send demand skyrocketing (or plummeting), leaving companies scrambling to keep up.
Hard seltzer brand White Claw felt the supply chain impact of a viral craze in 2019. The brand rocketed to Internet fame and became the subject of viral memes, with such immediate and widespread popularity that retailers did not have enough time to react, leading to empty store shelves and missed sales opportunities. Similarly, a Twitter-fueled feud between Chick-fil-A and Popeyes led to a nationwide chicken sandwich shortage for Popeyes and had fast-food chains scrambling with suppliers to meet the demand craze.
Getting supply allocations right is no easy feat. With the rise of influencer marketing and emerging social platforms, companies must be ready to turn on a dime in order to meet sudden swings in demand, or risk losing market share to competitors. Traditional tools for inventory management and supply chain planning are often disjointed and manual, leaving brands just one viral post away from a potential supply chain disruption.
“Consumer behavior is constantly evolving, and the growing influence of social media brings a new layer of stress to supply chain leads who are tasked with maintaining service levels, regardless of outside variables,” said Evan Quasney, vice president of global supply chain solutions at Anaplan. “Not only do supply chains need to quickly adapt to changing business conditions, today they must be agile enough to respond to demand spikes from a viral tweet or to manage an influx of returned product following a bad influencer review.”
Leveraging a connected approach to supply chain planning can help companies feel better prepared for the unknowns in an omni-channel shopping world that is increasingly influenced by social media. A connected supply chain consolidates company-wide data into a single source so supply chain leaders have granular, real-time views into supply levels, demand forecasts, and costs. With instant visibility into critical supply chain metrics, decision makers can model and review various scenarios, better understand potential disruptions and get answers to complex supply chain problems quickly. For one consumer electronics company, adopting a connected approach to supply chain planning reduced the time it took to execute a change in demand from two weeks to just one day.
Consider the impact a connected supply chain could have had on White Claw sales over the summer. When the company started to receive buzz, supply chain leaders could have more effectively collaborated with their marketing and sales teams and model various “what-if” scenarios to see the impact of the drink’s growing popularity on inventory, production and allocation plans. With instant visibility into performance metrics, the company could have known how much inventory to place at each distributor in order to meet the growing customer demand and could’ve quickly adjusted in order to improve inventory control and avoid costly stock-outs.
“As a company that manages thousands of product SKUs, we know it’s crucial to not only have visibility across our products, but an understanding of forecast drivers and demand metrics,” said Ben Pivar, CIO at Carter’s. “From the viral nature of certain seasonal outfits, to specific campaigns like our Original Bodysuit Day, having the ability to quickly adjust and improve inventory flow has helped us continuously drive performance and deliver more value to our business and our customers.”
A connected approach to supply chain planning can help businesses turn social media moments into value-added opportunities that drive growth and steer business forward. With a clear view of relevant internal and external factors and access to actionable insights, supply chain leaders can sense and drive demand, steer clear of stock-outs and excess inventory, and make dynamic, informed decisions at the speed of a viral meme.
