Use Your Demand Solutions Tools to Assess the Impact of Covid-19 on Your Supply Chain

Use Your Demand Solutions Tools to Assess the Impact of Covid-19 on Your Supply Chain

In these times of unprecedented change and myriad challenges that businesses are facing as a result of the Covid 19 impact on the world, the Demand Solutions team has taken comprehensive measures to ensure our employees, solutions and services continue to operate at the highest levels of performance and support for our Customers and their businesses. As supply chain professionals, mitigating the impact of disruption is a part of our everyday life and we want to make sure our customers and partners know that they can confidently rely on us during this time. We value your trust in our company and are here to support your business needs.

The immediate impact most companies are recognizing is abrupt and very significant changes in demand. As company plans and forecasts are critical signals for supply chain operations, how you analyze and reflect these demand changes in your forecast should be done after thoughtful review and planning. Demand Solutions, with our long history in Demand Planning and Forecasting, is offering this brief guide in some things to consider. We realize that forecast processes are different in every company. This paper is a starting point and we are happy to assist in answering any of your questions.

We recommend that your highest priority in managing your company forecast is to assess the impact of Covid-19 on your supply chain. Your Demand Solutions tools can be integral to this process. From a demand perspective, both history and forecast data streams are affected.

Forecast Adjustments:

  • As extreme changes in history occur, whether positive or negative, they will impact your statistical forecasts. You might already be seeing those this month and will likely continue to increase as more history is collected. Until the new demand levels in your history stabilize, the recommended approach is to apply forecast changes using the Global Changes tool.
  • With a Global Change setting, you can multiply the forecast by a factor for specified periods. For example, if you are assuming a 30% decrease April – June, the Global Change setting would multiply those three months by 0.7 to reduce the forecast. Next month, as the impact of having another month of history is reflected in the forecast, the required percent change might be different.
  • The Global Change is run on a specified set or range of records. If a particular set of products is expected to be affected differently, you would create a range for each set of records that requires a different adjustment as specified by the Global Change.

Totals:

  • If you don’t already have them in place, Aggregates can be created to get totals at any level. This enables your to look at demand at a summarized level. If you are importing unit costs and/or prices, aggregates will display total monthly history and forecasts in dollars.
  • To get a sorted list of units summarized across months of history and/or forecast, an ABC report can be generated an exported to Excel. Again, if unit costs or prices are in your DS data, the results can be presented in extended dollars.

Normalized History:

Finally, as you are assessing the Covid-19 impact, you should have the clearest view of what your demand would otherwise have been. Since forecasts are generated from this history, you will need to determine what to do with your history. If you believe the Use Your Demand Solutions Tools to Assess the Impact of Covid-19 on Your Supply Chain impact is transient and your demand forecast should not be based upon the missing demand, you should adjust your history to more normal demand without the impact of Covid-19. If you believe the loss of demand or some amount of the lost sales need to be reflected in your demand, you should adjust your history. Now is the time to reflect the changes in your historical data unless or you will see the effects of these exceptional months in your forecasts for years to come.

Here are steps to take:

1. Identify these exceptions in the past month, with Range Functions (DSX) or filters (DS1), comparing last month against normal months.

2. Were changes constrained to specific markets? Use a Sort in Navigation (DSX) or Pick lists (DS1).

3. Record an estimate of the positive/negative impact into an exceptions data stream using Global Changes. Alternative methods:
a. Copy a forecast for last month into last month’s history
b. Copy an average of the prior n months of history into last month
c. Record a % up or down

The desired end result is to be able to have a record of “normal” and the assumptions you are making in creating that normalized history. Repeat this process monthly or even weekly if fresh data is available. Arrive at assumptions using a team consensus view. Tune it as you learn more. When business is stabilized, normalize the anomalous months of history using the exceptions data you’re capturing.

We Are Here to Help Your DS tools are designed to help you evaluate and manage changes, whether they be temporary or permanent shifts. If you require further instruction or assistance, email our support team at support@demandsolutions.com. For customers with active support agreements, you are welcome to enter them into our support portal at https://dssupport. microsoftcrmportals.com. We will collect your questions and answer as quickly as possible. Customers are also welcome to reach out to your sales representatives for assistance.

2 Comments

Comments are closed.