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23 May, 2018 00:00 00 AM
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Seasonal products: Demand and management

For every new product a company makes, new packaging and artwork need to be designed, and a process needs to be created to source, make and introduce the item to the market
Taslim Ahammad
Seasonal products: Demand 
and management

All year round, almost every industry has some form of seasonal product that is in demand. Hence, product demand forecast becomes more critical when introducing a seasonal or new item to the market during Eid, Christmas or Diwali. This process helps improve return on innovation, supporting sales of Eid, Diwali, Christmas, summer, winner, or any other auction sale without tying up cash in unproductive inventory for items that fall short of expectations.

For every new product a company makes, new packaging and artwork need to be designed, and a process needs to be created to source, make and introduce the item to the market. And, a team needs to be responsible of managing the seasonal product.

To deal with seasonality strategically, firms need to simultaneously trade off fixed and variable capacity costs with inventory carrying costs. Companies like Mattel put more stock in fixed capacity, using production smoothing to evenly produce toys from January through September, preparing for its holiday demand. Despite the fact, smoothing allows it to use production resources evenly over some month period in preparation for its holiday rush; it causes a large stockpile of inventory the remainder of the year. And if demand for ‘Eid or Christmas’ does not hit, staff /product gets stuck with old-fashioned inventory. Other organizations avoid inventory stockpiles; however, build capacity to peak requirements, meaning lots of unused, idle capacity the rest of the year. So some firms choose to deal with seasonality through variable capacity, increasing seasonal labour or diverting production needs to outsourcing partners. Every so often, these outsourcing services prevent an organization from building large amounts of capacity to meet peak demand, but cost a best. Selecting which method to use is not simple: if a business does not figure out the right combination, it will be left with piles of inventory, colossal costs, or an incapability to meet production demands.

Nowadays, businesses effectively deal with seasonality; nevertheless, they do not optimize the opportunity or challenges it presents. Many firms use approaches irregularly to obtain short-term solutions, on the other hand fail to consider the right combination that will best match seasonal supply and demand with overall operations. The result is unfilled demand or an excessive supply that leads to perished inventory and lost sales.

In advance, determining whether to increase capacity, a firm should use strategic approaches to trade off inventory and capacity resources, like extra shifts during the holiday season. As a result of factoring operating variables like inventory risks, overtime costs, and outsourcing premiums into decisions regarding manufacturing and distribution capacity, a firm can create a strategy that defines the optimal network capacity and major strategy.

Instruction: Make sure of your analysis before launching a new product and prepare your supply chain for the requirements of creating and selling the new item for the season.

For the period of a seasonal flow it is important to be prepared to make the most profit. Choose on an optimized method to manage your new business product distribution during these times will make for a more successful season and for an efficient supply chain throughout the entire year.

The writer is Assistant Professor

Bangabandhu Sheikh Mujibur Rahman Science and Technology University, Gopalganj, Bangladesh.

taslim.ahammad@gmail.com

 

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Published by the Editor on behalf of Independent Publications Limited at Media Printers, 446/H, Tejgaon I/A, Dhaka-1215.
Editorial, News & Commercial Offices : Beximco Media Complex, 149-150 Tejgaon I/A, Dhaka-1208, Bangladesh. GPO Box No. 934, Dhaka-1000.

Editor : M. Shamsur Rahman
Published by the Editor on behalf of Independent Publications Limited at Media Printers, 446/H, Tejgaon I/A, Dhaka-1215.
Editorial, News & Commercial Offices : Beximco Media Complex, 149-150 Tejgaon I/A, Dhaka-1208, Bangladesh. GPO Box No. 934, Dhaka-1000.

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