Responding to random event called 'Sales'

'Demand Planning' has been in vogue for a while. Simply put its ancipating the probability of occurance of an event called 'Sales' led by an action by an entity called 'Customer'. Sometimes 'Consumer'.

Supply Chains have gotten themselves equipped with all possible ammunition to meet the 'demand' in the most efficient way. Processes have been laid down to forecast, parameters for identification of variations are more than what humanly is identifiable and demand planning process is an obession for most of the stake holders in the organisation. Network Analysis and Decisions have been the core of Supply Chain Design which dominantly exists for aligning and synchronising the supply side with demand (read: what the customer may need). Inventory policies are laid down with identification of safety stocks and reorder levels.In the supply chains which are mutli organisations and geographies, 'technology' becomes the back bone of the planning process. Hence Supply Chains have invested (rather over invested) is advanced planning and optimization softwares so as to remove all possible errors in anticipating demand.

Supply Chain have hence become extremely structured with well laid down supply chain network, planning processes and KPI's(!) to respond to an event called 'Sales' which by it's inherent characteristic is 'Random'. The probability of all the actions contributing to the event called 'Sales' (like Product, SKU, Packaging size, Price Point, Purchase point) make the overall probability of occurence of the event too thin to derive much from those calculations.

Wonder if 'Structure' can handle 'Randomness'. Structure by it's own definition implies construction which means organised with lesser degrees of freedom. Randomness necessarily lacks structure.

In today's Supply Chains, a random event called Sales led by the customers desire to purchase is being attempted to be responded through a well laid down, policy driven, Supply Chain Structure. Fundamentally doubt if this works.




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