The advanced material manufacturer was looking to strengthen cash flow and increase profits, hence, approached Research Nester to enhance the supply and demand strategies to improve forecasting and manage disruptions.
One client is one of the leading manufacturers of advanced materials prominently associated with the chemical industry. It specializes in the production of high-performance materials. These materials are supplied to various sectors, and our client is the leading supplier to automotive, electronics, and aerospace businesses. Despite its market positioning, our client recently faced challenges in accurately forecasting demand. This impacted its supply chain and kept it relevant to the growing demand. The company understood the need for additional strategic consulting to manage its supply and demand. The Vice President of Supply Chain reached out to Research Nester for assistance. Our client already had a team of experts to understand the challenges; however, it was looking for assurance and some key changes that may have been overlooked earlier.
Our esteemed client is a leading player in the smart devices industry with expertise in the manufacturing and distribution of an extensive array of connected devices, such as smartphones, wearables, and home automation solutions. With a strong international presence their primary goal is to provide innovative products that fulfill customer expectations and foster market expansion.
1. Excess inventory and stock fallouts due to inaccurate forecast predictions
Excess inventory can cause miscalculations in demand forecasting. Our analysts compared the inventory against the demand over the past 5 years. After a detailed survey, it was observed that the inventory was not planned according to seasonality, which is a key factor for any manufacturer. This leads to dead stock, impacting the cash flow of the business. Another reason for excess inventory was due to customers returning the goods due to bad reviews and product quality. This was the area that needed extra attention.
We suggested that our client understand and work on the product quality. A little investment in product quality and enhancement would help them recover 15% of the excess inventory. Advanced analytics, i.e., analyzing historical data, identifying patterns, and predicting future demand with higher accuracy, and machine learning can improve the Additionally, marketing campaigns like flash sales and influencer campaigns can be implemented to manage and adjust to the changing shift in customers. Our client already had a few sales and campaigns in place; however, targeting and adjusting to seasonal trends was the only amendment required. This helped our client reduce the excess or dead stock additionally by 28% over 2 years.
2. Geopolitical factors causing frequent disruptions
Natural disasters and extreme weather events are the most prominent risks to the uninterrupted functioning of supply chains, i.e., the recent Arab Spring in West Asia. Previously, COVID-19 was also a disbalance in the supply chain. Our client was suggested in planning and preparing for such a natural disaster. Our analysts compared the client's suppliers’ vendor and logistics partner data. It was observed that our client needs to diversify their suppliers and focus more on third-party logistics providers. This will automatically improve demand forecasts and maintain safety stock.
Flexibility and diversification of the supplier base reduced the supply chain disruption by 38% during the last 2 years.
Our supply- and demand-focused strategic consulting has successfully assisted our clients with supply chain and forecasting challenges. Our advanced analytics, diversification of suppliers, and strategies enhanced operational efficiency and boosted the company’s profit. This is an example of data-driven decision-making and supply chain resilience in achieving business growth.
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