Whether due to changing consumer taste, or in the attempt to establish the next big consumer craze, new products are launched into the UK marketplace every week. And this, of course, is no bad thing. It keeps consumer choice vibrant and sustains interest in both old and more recent brands. It stimulates consumer spend, which can in turn result in increased confidence in the investment market and thus encourage a generally bullish economic milieu.

Collaboration constraints

However, without an efficient and reliable supply chain, even the very best marketing campaigns are on a hiding to nothing. Consumer interest in a new product can be generated, only to leave potential customers disappointed, staring at empty shelves. To make matters worse, this can in some instances result in appalling public relations in the press, even for the most secure and respected brands. On many occasions, the problem relates to poor collaboration within the supply chain network.

Taking stock

Problems can also occur at a more local level. Take manufacturing; the producer brand may provide its manufacturer with plenty of advanced warning regarding the new product or range, together with detailed specifications concerning design and required bill of materials. The supply chain may be finely tuned in terms of sharing information and ensuring each stage of production and distribution is perfectly executed. The supply of goods to the retail outlets may be flawless and the marketing campaign may have had enough impact to have attracted the public into buying the new goods in healthy numbers.

However, in the wake euphoria surrounding the new product's success, little thought may have been given to certain potential problems surrounding the effect it will have on the brand's previous product or product range. 'Cannibalization' - a reduction in the volume sales, market value or market share of the previous product or products as a result of the 'new arrival' by the same producer - is often the result.

For the manufacturer who may have built up a sizeable stock of components or materials related to these more mature product lines, a surplus of inventory can result, due to a falling off of hitherto high demand levels. Even worse, the previous product range may be pronounced old hat by its producer brand and phased out very rapidly, in many cases leaving the manufacturer with a glut of expensive yet near worthless parts and materials. The outside world may never hear of this occurrence, maybe due to some form of professional embarrassment on the part of the manufacturer. Yet this can be a serious problem with potentially devastating financial consequences.

Balancing production

Even if some form of collaborative supply chain communication channel is in place, efficiency at the production level is, of course, by no means guaranteed. You may be able to set your watch to the punctuality of the manufacturer's parts and materials supplier, and the distributor might be primed for action on receipt of finished goods. But if the manufacturer himself fails to have an effective capacity planning and scheduling methodology - balancing machinery, personnel and timelines for the new project with everything else in the order book - then the whole supply chain is in danger of collapsing like a pack of cards.

Solution

So what is the solution? Constraints such as poor demand planning and capacity scheduling on the shop floor, too many disparate channels of communication across the supply chain, and ineffective inventory management all point to the need for a state-of-the-art, fully customisable demand planning & scheduling software package.

The software should have the capacity to be fully integrated, web-enabled and visible to all parties concerned - the manufacturer, its suppliers, distributor, and producer/customer - across the entire supply chain, whether UK-based or more geographically far-reaching.

It should be able to ensure everyone involved has knowledge of future anticipated demand patterns, so they can prepare the means and capacity to respond accordingly when the time comes. Seamless sharing of forecast demand information can not only aid each company in the supply chain network in terms of planning time and resources in advance, it can also provide them with related project information in order for them to appropriate the right level of finance in preparation for when things start moving.