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Holiday Hangover: Post-season SCM Tips

Jan 2, 2015 2 min

The holiday season is over and all those who worked so hard to ensure their supply chains coped with the season’s all-consuming frenzy are looking forward to focusing on other things. However, to lighten your workload in the coming years, I suggest you do a couple of things before you consign the previous Christmas season to history along with the discarded wrapping paper. I have noticed that future seasons are easier to manage, and demand easier to forecast accurately, if you put in a little extra effort each time a season ends.

My Top Post-season SCM Tips Are as Follows

  • Review your successes and failures honestly. Which forecasts proved to be good and which were bad? Where did you end up with excess stock and why? And why did you find yourself out-of-stock of certain product lines? Did your material flow controls cause capacity challenges anywhere in the supply chain (DC, store shelving)? Was there anything that took you by surprise?
  • Use this information to assess what you could have done better: what would have been the best control settings, or the perfect scheduling and quantities for stock allocations? The best plan is always easier to formulate with the benefit of hindsight, and now is that time. You are not doing this to make work for yourself, but to help during future seasons; so record your best ideas in a memo or, better still, implement them within your supply chain planning solution. It is a very good template from which to start planning for next Christmas – and that time will come round surprisingly soon.
  • Lastly, check and/or adjust corrected sales estimates for the season. Most sophisticated supply chain planning systems use corrected sales in their forecasting. This takes into account estimated lost sales from out-of-stocks, as well as quantifying the extent of natural demand when sales have been driven by markdowns before the season’s end. These are normally calculated on SKU-Store level and as such form a far better data platform from which to start planning for the next season than the raw sales data.

    However, at a minimum, it is good to check the outliers – the sales hit by lots of out-of-stocks and estimated additional sales and product lines sold mostly through heavy discounting. The checks and adjustments can normally be done on a SKU-Chain level, and focusing on the extremes makes the labor involved in checking bearable and the task actually quite quick.

If you have the energy to check what you could have done better, record the best allocation plan to your system, and ensure that you have as good a demand picture as possible from this past season recorded in your forecasting solution – then planning for the next Christmas season will almost certainly be much easier. Maybe once you’ve done that you can then, finally, put this Christmas behind you and relax a little.

Have a look at our white paper by Tommi Ylinen on how to manage the Christmas Supply Chain.

Written by

Mikko Kärkkäinen

Mikko Kärkkäinen

Co-founder & Group Chief Executive Officer