How to respond to surges in logistical demand successfully
From time to time, supply chains experience increases in peak demand. Some are predictable, such as those that occur in the last quarter of each year, and others are unforeseen, such as the one experienced during the COVID-19 pandemic, when population confinements were ordered in many parts of the world and e-commerce soared. How to adapt to these peaks in demand? What are the keys to responding effectively to these changes?
Advance procurement is one of the best measures to take in the case of non-perishable goods. These supplies, which must be coordinated months in advance as they involve several actors, imply advance payments and can lead to gaps in the company’s cash flow. It should be borne in mind that peaks in demand have in common the appearance of cost overruns that must be managed and assumed in order to achieve efficient responses.
Diversify operational suppliers
Freight forwarders diversify both their suppliers for long-haul operations and the companies that deliver goods to them in the last mile. The intention is to reduce the risks of saturation. It is common for large shippers to choose to have an increasingly open portfolio of transport and delivery companies. This also extends to reverse logistics. In this way, one does not depend solely on the operational capacity of a single player in phases of increased consumption.
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One of the main causes of the tension between demand and supply of goods is the difficulty to adjust the lead-time (time elapsed from the start of the production process of an order until it is delivered to the recipient) to the customer’s order cycle. To solve these problems, the concept of demand visibility is being developed.
Detecting demand in real time and sharing this data with all the components of the supply chain makes it possible to match the two concepts, since it makes it possible to match in real time and, on the other hand, to have more time to deliver the goods. This makes it possible to reduce inventories and their high costs, such as space, operators or machinery.
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Shippers need to be more flexible than ever when faced with the possibility of peak demand. Trucksters are incorporating advances in Artificial Intelligence and Big Data that enable logistics managers to achieve the highest order fulfilment rates at all times.
The driver relay system means that loads travel at twice the speed of traditional transport, with four times the efficiency and 95% freight security. Relaying along long corridors over distances of more than 1,200 km makes it possible to find drivers more easily, ensuring an optimal response to surges in demand.
“Trucksters incorporates advances in Artificial Intelligence and Big Data that enable logistics managers to achieve the highest order fulfilment rates.”
Ensuring inventory availability
Availability of inventory in cases of peak demand is possible by working with alternative suppliers. On the other hand, demand shifting is sometimes a viable option. Increases in demand, especially unexpected ones, may provide an opportunity to cross-sell certain goods with items that did not have the expected turnover, or with complementary goods.
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