Supply Chain Management Blogs by SAP
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The holiday shopping season is bearing down upon us faster than Santa’s sleigh speeding down the autobahn. But don’t let this fast-moving, volatile time of year get in the way of spreading joy across your business. Check the latest consumer spending trends (and check them twice) to ensure the lights are fully activated across your entire value chain.

According to a recent survey by Deloitte Development LLC, two-thirds (66%) of respondents plan to do their holiday shopping during Thanksgiving week (up from 49% in 2022) to take advantage of deals during Black Friday and Cyber Monday week. A recent NRF study found the same with over 196 million holiday shopping during Thanksgiving weekend last year.

NRF also finds that most Christmas shopping happens online (58%), followed by brick-and-mortar (49%), discount stores (48%) and grocery and supermarkets (44%). Gift cards remain popular (55%), followed by clothing and accessories (49%), books, video games or other media (28%) and personal care or beauty items (25%).

While the holiday shopping madness that creates spikes in demand and complicates logistics aren’t a surprise to anyone, supply chain disruptions chip away at customer satisfaction in the form of empty shelves and back orders.

Drilling down into consumer data helps manufacturers and retailers understand supply chain risks and enables proactive measures to create contingency plans to avoid potential problems or delays.

Forecasting customer demand

As the holiday selling season nears, precise demand forecasting becomes vital for efficient supply chain management, particularly during the BFCM week and the holiday season kickoff. Yet, predicting demand accurately amidst evolving purchasing patterns due to economic uncertainties and potential demand spikes remains a challenge, making optimal inventory management complex.

Leveraging SAP Business AI in Supply Chain can foster a resilient and sustainable supply chain by swiftly predicting and adapting to customer demands. It also enhances operational efficiency through AI-driven visual inspection, anomaly detection, and intelligent auto-dispatching for increased production efficiency.

Identifying alternative sources of supply

Events such as the drought in Panama and production outages at Toyota plants once again demonstrate the vulnerability of the global supply chain, especially when companies operate with only a single-source strategy.

However, to minimize risk and achieve faster availability for the holiday shopping season, companies should work with multiple suppliers and contract manufacturers in multiple regions for their key resources and products to avoid production outages or delivery delays.

Optimizing transportation and logistics

During the upcoming busy BFCM week and the holiday season, transportation may experience bottlenecks as many companies need to deliver at the same time.

With the help of the SAP Transportation Management system, companies can not only better manage their fleet, but also optimize transportation routes using real-time GPS data so that deliveries not only arrive on time, but also help reduce CO2 emissions and transportation costs.

And based on the information gathered, traffic alerts can be issued early and suggestions for alternative routes developed to reduce the risk of delays.

Improving transparency

To ensure a successful Holiday season and maintain customer satisfaction, real-time visibility across the entire supply chain is vital. This transparency provides insight, monitoring and optimization at every stage, from raw materials to delivery, reducing inefficiencies and product recalls.

With the help of modern technologies like AI, companies can ensure a merry holiday shopping experience while setting up a happy new year for growth.

To learn more about how to minimize supply chain risks and maximize opportunities with resilient, sustainable, and customer-centric supply chains, download the latest study from Oxford Economics.