FOUR RECOMMENDED ACTIONS The disruptive impact from COVID-19 on most businesses and their supply chain is severe, and for many supply chain leaders, the worst is probably still to come from the lock-down now also spreading across US and Europe. As an immediate response to this crisis, many businesses have already set up a ‘war room’ and a crossfunctional Crisis Management Response (CMR) team to quickly and effectively address the immediate and adverse effects of COVID-19 on their supply chain. The focus has – for good reasons – been short term. The attention of many supply chain leaders is, however, already now gradually starting to shift from short-term firefighting actions to more medium- to long-term actions aimed at stabilising and strengthening their supply chain. Given the significant disruptions and volatility in customer demand that most businesses are experiencing and will continue to do so in the coming months, one such medium- to long-term action should be to assess and ensure that demand planning capabilities are sufficient: • Does the current short- to medium-term demand forecast offer a true and realistic picture of the anticipated demand, not only at an aggregated level but at item level, given the current market volatility and resulting fluctuations in the demand? • If this is found not to be the case, is this then because of insufficient processes, competences, tools or perhaps a combination of these? In the context of the above, we suggest businesses to take one or more of the following actions in order to ensure that timely, risk-informed and action-oriented decisions can be made as an integrated part of the company’s Sales & Operations Planning (S&OP) process. THE FOUR ACTIONS IN SHORT 1. (Re-)assess and, potentially, redefine the level of granularity and time horizon used for the demand forecast 2. Assess and, potentially, redefine the current demand planning process 3. Leverage statistical forecasting and demand sensing tools to generate a realistic demand forecast on a continuous and frequent basis 4. Assess if the current people skills and resources available are sufficient and, if not, decide how best to close this gap 3
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