Holiday Inventory & Demand Planning for Fresh Produce
Holidays are a time when people enjoy coming together with family and friends to share a festive meal that is often filled with a variety of fresh produce. As a busy mom of two young children, it is important that I can purchase every produce item on my holiday shopping list with the peace of mind that it has the freshness and quality to last in my fridge at least three to four days. But how does that produce arrive at my store exactly when I want it? It all starts with a plan, just like when an individual prepares for a holiday meal. The first step is to answer questions about how many guests are coming, and their food preferences. For example, the July 4, 2013 is a Thursday. Like many others around the country, I intend to celebrate with my family twice, on the fourth and the following Saturday. This means I will likely shop twice, especially for my perishable items. Understanding when to have that product available for your consumers is the first step in developing your plan. During the holidays, consumer demand for a given product can increase 50 to 500 percent. When it comes to seasonal items that are an important part of holiday traditions, consumers may be more willing to overlook price. Collaborating with your supplier(s) to establish the increased level of demand in is an important second step. This improves visibility throughout the supply chain to arrange for accurate product supply to meet demand. Since most products have holiday demand spikes, crops are planted with the intention of meeting these expected spikes. However, what happens when an unforeseen factor disrupts supply availability or impacts the forecasted consumer demand? Maybe the weather is too cold or too hot or a certain area of the country is experiencing rain, or not enough rain. Creating flexible contingency plans is a crucial third step in the execution of any plan. One option to help guarantee availability of a hearty product is to adjust the inbound product flow to the early part of the promotion. This and other ways allow you to build flexibility into your supply chain to overcome unanticipated challenges. The last piece of the holiday demand puzzle is a real-time understanding of store-level performance. When it comes to last minute holiday shopping, if a consumer can’t find what he or she is looking for, unlike a regular week, they may not be willing to find a substitution for that item. Proactive planning ensures your consumers don’t leave empty handed, and you don’t lose a sale. Given that we operate in a highly perishable environment, the ability to create an effective holiday flow, as well as an exit strategy is critical. So from my family to yours, may your upcoming holidays be filled with family, friends, and thanks to careful planning, fresh produce. Disclaimer: This blog originally ran July 7, 2013 on Transportfolio.