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Demand Uncertainty Remains Number One Supply Chain Concern This Holiday Season 2012

Consumer demand remains unpredictable

(Westport, MA) – LifeWork Search, a recruitment organization specializing in Supply Chain, asked its network of supply chain individuals what they felt the top supply chain concern was for the 2012 holiday season.

Fifty-nine percent of respondents indicated that demand uncertainty is the top supply chain concern within their organization, three times the amount of any other option.  Eighteen percent felt inventory surplus was the top concern, 12% voted for inventory shortage, while 8% believe lead times are the top holiday concern, and 3% chose “other”. 

LifeWork Search conducted the same poll two years ago, and the results were very similar.  Back in December of 2010, 45% of respondents voted demand uncertainty as the top holiday concern, inventory surplus and inventory shortage both received 18% of the vote, 12% believed that lead times were the top concern, while 7% chose “other”. 

“The holiday season has been improving year to year since the economic downturn, yet companies are still uneasy with their predictions on consumer spending”, stated Jason Breault, Managing Director of LifeWork Search.  Jason specializes in Supply Chain Planning.  “Forecasting still remains a top concern for many organizations, especially for those who got caught off guard by the recession because they did not have a demand planning process in place.   An accurate demand plan can save a company millions.”  According to a survey by IBF, the Institute of Business Forecasting, Consumer Goods companies could save an average of $3.53 million a year by reducing the error of under-forecasting by just 1 percentage point and $1.43 million a year reducing by the same percentage point in the case of over-forecasting.

Over- or under-forecasting the demand this holiday season can be extremely costly for Consumer Goods organizations.  Back in October, the National Retail Federation announced their 2012 holiday forecast, predicting sales would increase 4.1% from 2011.  Numbers are off to a good start with Black Friday outperforming the past 5 years in stock market performance, and compared to last year, sales were up 28%, while Cyber Monday was one of the busiest ecommerce days in history according to ComScore. 

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