Demand Planning Against COVID-19: Introduction

Demand Planning COVID Introduction Blog - QAD DynaSys

Due to the emergence of COVID – 19 all company processes have been impacted; especially the supply chain and the flow of materials within it. This article is an introduction to a series of three articles intended to help demand planners manage the impact of COVID – 19 on their demand planning process.

The emergence of the Coronavirus disease 2019 in our lives has seriously affected our products’ demand and their volatility has become more significant than ever. The volatility results in less accurate forecasts and they require corrections and additional manual work by users to obtain forecasts that adjust to the new reality.

As a result of this uncertainty, it is important to set KPIs to measure and track forecasts’ performance so the planners are able to make the right decisions in order to get the best forecasts possible. These KPIs should be reviewed weekly as the situation could change quickly and businesses need to adapt to the new scenarios and have to be as agile as possible.

A factor that we must also take into account is the great added impact that external information has on the demand. It means that the demand’s volatility is highly exposed to the decisions and/or policies announced by governments.  These government policies can be demonstrated by the fact that citizens of different countries have been forced to confine themselves for a different period of time to control the spread of the virus.

Another consequence of the emergence of the virus has been the concentration of the demand on online channels. Companies have seen that due to the increase in restrictions on the mobility of citizens, sales have concentrated on the online channel, reducing significantly or totally on conventional supply chain channels.

In addition to all of these impacts, we must add the serious economic crisis that could follow the health crisis, as it may affect the demand pattern in the short, medium, and long term. This situation must make us rethink whether we should review the company’s objectives since the forecasts in this new scenario will probably not be those as expected at the beginning of the planning year.

If you are interested in understanding how COVID-19 is impacting companies and which actions companies can take to be more efficient and reactive, be sure to read next week’s article on this blog.