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Transparency of consumer demand helps in building resilience.
Retailers are the consumer facing partners in the supply chains, who have access to actual consumer demand for various products. This important piece of information is vital to design and run the supply chain in a pure Demand Driven fashion and avoid the infamous bullwhip effect.
Sharing of offtake information with relevant manufacturers helps in creating a resilient supply chain. The impact of changes in consumer demand should, in turn, be processed by the manufacturer’s supply planning team and shared with all the relevant partners, including vendors, for timely action.
In absence of the consumer offtake information, manufacturers try to second guess it through the orders placed by retailers, which already have an element of bullwhip. It also suffers from the inefficiencies of time aggregation as the information comes in at a much lower frequency.
Manufacturers should focus on building win-win partnerships with retailers to share offtake information with an aim to benefit consumers through higher availability and freshness.