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Are you stressed during consumer promotions?
Most supply chain teams get stressed during execution of consumer promotions. When the promo starts, many sales managers would reach out to the supply team that they need more stocks, since demand is much higher than what was planned. The territories where demand is subdued often keep quiet, hoping to run the same promotion for a longer time!
If the company has the policy of pre-allocated promo quantity to each sales region, the mismatch in ending time of the promo gets even more accentuated.
How do we ensure that consumer promotions are executed smoothly? To start with, we need to sense the ongoing demand for the promo item. It should be frequent and granular. What works well is to sense and predict demand at the distributor-channel level and refresh it daily, to capture shifts in demand patterns.
Having sensed and predicted the short-term demand, we need to supply to this prediction. If the company policy is becoming an obstacle, change it.
Companies using this methodology end up with smooth execution and the promo ends almost simultaneously in all the territories with no stockouts and no inventory pileups.