Managing Demand Planning & Forecasting for Highly Unpredictable Products

Simphiwe Mbonami

Simphiwe Mbonami

In the field of supply chain management one is bound to deal with complex problems in various shapes and forms. The key differentiator between an average practitioner and an excellent one is the ability to generate solutions that not only deliver results in the short-term, but long into the future as well. This is the challenge that I faced when I had to manage the demand planning of a highly unpredictable product that is essential for generating electricity for South Africa. Product availability levels were averaging around 30% against a minimum requirement of 80%. At a time when the South African grid was under severe strain, it became critical that we develop sustainable solutions that could provide certainty to the continuity of supply challenge that we faced.

Often we make the problem of adopting a short-term focus that eliminates the problem at hand without addressing the systemic issues that have led to the crisis. This approach is narrow in its view and does not ensure sustainability of results achieved. One of the key success factors for us was to understand and acknowledge that we were playing in a bigger system in place and problem solving would have to cater for the multiple complex relationships within the broader supply chain network.

The systems thinking approach is one way in which one can go about bringing certainty into the demand planning process. This involves identifying the multiple stakeholders involved in the supply chain network and determining their needs. The importance of this exercise is to ensure that stakeholders that may not, at face-value, be considered as key players may in actual fact need to be involved in the demand planning process.

One such example was that of a supplier who was not successful in winning our business, but who controlled the flow of imports into the harbor into which our suppliers were bringing product. Our main suppliers were continually having challenges gaining access to deliver, only for us to discover at a later stage that the root cause was in actually fact the disgruntled supplier. By identifying their needs and developing a demand plan that integrated multiple stakeholder needs, we were able to bring certainty into the supply chain planning process whilst dramatically improving product availability to an average of 95%.

Traditional approaches merely scratch the surface when it comes to demand planning; it is the use of powerful approaches that yields powerful results.

Simphiwe Mbonambi
Senior Manager: Supply Chain Planning
Eskom Holdings SOC Ltd

Hear Simphiwe speak on planning for the unplanned at IBF’S  Business Planning & Forecasting: Best Practices Conference in Orlando Florida, November 4-6, 2013

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