Note: Today’s post is part of our “Editor’s Choice” series where we highlight recent posts published by our sponsors that provide supply chain insights and advice. Today’s article is from Kinaxis and explores the TikTok Effect. Or, why you need demand planning for going viral on social media.
Overnight, millions of people are clamoring for your product. It’s a dream come true for your business and a nightmare for your supply chain – and you only have TikTok to blame.
The social network’s increase in popularity has given rise to viral trends, as user-recorded videos spike in popularity dragging certain products along with them. In the past year, we’ve watched cranberry juice chugged to the soulful sounds of Fleetwood Mac, given new life to our leftovers with a simple tortilla hack and roasted tomatoes and feta like the Finnish. It’s communal, delightful and entirely unpredictable – and it’s catching supply chains off guard.
Reports of demand spikes and shortages followed each of these instances, and it’s not just affecting food and beverage supply chains. After slime-making became an Instagram fad in 2016, Elmer’s Glue sales doubled. This year, many are predicting cleaning product surges, following the success of The Pink Stuff and engagement spikes around housework hashtags.
Brands don’t have to wait for empty shelves to take action, though. Thanks to demand planning innovations, supply chain planners are detecting potential demand spikes before they become global phenomena – even when that data comes from outside sources, like TikTok or Google Trends. These capabilities, combined with existing agile supply chain practices, can help your business embrace the social media hordes if or when they arrive.
How do you plan for a social media-driven demand spike?
One of the best ways to prepare for known unknowns, like going viral on social media, is to build a scenario planning playbook. These guides have what-if scenarios and forecasting models for potential disruptions, so your planners won’t waste time making decisions when every second counts.
These could include options for what to do when demand spikes, a plant goes offline or you are facing a raw materials shortage. They even take into consideration disruption severity or risk tolerance. “These forecasts can then be incorporated into scenarios, so you are ready with your best outcomes, depending on which reality arrives, and can quickly adapt your plans accordingly,” says Polly Mitchell-Guthrie.
But a playbook alone is not enough. To be able to react in real-time, supply chains need an integrated planning system with end-to-end synchronization that enables everyone in the network to instantly see and respond to the impact of a change while maintaining alignment with business objectives. The integration should be global and holistic, not just horizontal, so teams can identify and prioritize a viral trend in one region without negative impacts to customers in other areas.
For example, Procter & Gamble relied on its integrated planning system and scenario planning capabilities to respond to regional disruptions during Hurricane Irma. Social media did not play a role, but as with any unanticipated event, having total visibility enabled P&G to prepare its supply chain across all at-risk areas, so it could meet customer needs without interruption.
To read the full article, click HERE.