For those not familiar with forecasting or demand planning February 14th is just another holiday. But for those with a deeper understanding of what it takes to coordinate a successful supply chain, the mere thought of the day can cause anxiety. As a marketing specialist working next to our Forecast Xperts here at John Galt Solutions, I cannot help but begin to understand what demand planning is and how it pertains to everyday life around me.
February 14th, 2019 (otherwise known as Valentine's Day)
Growing up as a young boy in rural America, when it came to Valentine’s Day my thoughts were certainly different than they are now. Yet one thing that has never changed…I just don’t get it! But, as any boy with a crush will tell you, I played along. Except now when I play along, as a recent transplant to the demand planning and forecasting field, I look at the entire process around Valentine’s day, not just cheesy heart-shaped boxes of chocolate or the cliché bouquet of roses. As I stare in awe at the endless shelves of heart shaped nonsense, I think to myself, “They must have had one hell of a planning team behind them to pull off such a seasonal spike in demand!”
Before I get to see her smile in delight, or I get that thankful hug, and definitely before she tells her friends what a good job I did, hopefully, there is over a year’s worth of planning and data analysis that goes into Valentine’s Day. This holiday is, for all intents and purposes, a last-minute holiday. Most likely because, and let’s face it guys, we aren’t the most prepared species when it comes to a holiday that we used to consider a success if we managed to get our perforated “Be Mine” cards into the cubbies of all the girls in our grade. Whether it’s because flowers are a perishable elegance or the fact that around 75% of Valentine’s Day purchases are made by men, this holiday can be a demand planning nightmare for chocolate and floral companies alike.
Picture this, you are walking around anywhere in the upper United States in early February. What do you see? Snow, bare trees, and vehicles covered in salty residue. What you don’t see is the endless view of flowers scattered about that you long for. Now imagine you’re a distributor of flowers during this time, which coincidentally happens to be the same time as the holiday that will bring in nearly 1.8 billion dollars to your industry. If you haven’t been prepping for this or do not have an effective forecasting tool there is a good chance you are going to quickly experience a stock-out and miss out on your share of that revenue boost.
On the other hand, if your demand planning software has been working with your historical data you can count on being well prepared and ready for the push. Along with successful demand planning comes the ability to manage your supply chain through supply chain analytics. The chocolates and flowers that are sure to make someone smile come the 14th must get from the grower to the retailer in not only an efficient manner but, in the case of flowers, must do so while maintaining proper temperatures in order to preserve their vase life. This is especially difficult given that the majority of flowers sold in the United States are from regions in South America, Africa, and Europe. With over 800 million flowers being inspected from Jan. 1st – Feb. 14th in the port of Miami alone it’s no wonder the most successful are those with a solid demand planning solution already in place.
Having the proper planning tool, such as the Atlas Planning Suite, can help your business prepare for seasonal peaks while managing complex variables such as lead time, capacity constraints, and sales patterns. Atlas helps you leverage your history of prior seasons and recent trends to ensure you have the right inventory at the right time. Make sure it’s the roses that are red and not the bottom line.
Tim, Digital Marketing Specialist at John Galt Solutions