Accurate demand forecasting is fundamental to building a sustainable supply chain, as it enables organizations to align supply with actual needs while minimizing waste, excess inventory, and unnecessary transport emissions. By anticipating demand effectively, the ICRC optimizes procurement, ensures timely deliveries, and reduces reliance on carbon-intensive transport methods like air freight. Forecasting also enhances resource efficiency by preventing stock shortages that could lead to costly emergency shipments and by avoiding overstocking, which can result in waste. A well-planned supply chain reduces environmental impact, improves cost-effectiveness, and strengthens resilience, ensuring that humanitarian aid is both responsive and sustainable. Let’s go into more detail on what ICRC has been working on for a decade:
Collaborative Demand Planning
At the ICRC, a dedicated process has been in place for years to minimize warehouse waste through effective planning and forecasting. A key component of this approach is Collaborative Demand Planning, which ensures that operations align with organizational priorities and minimize inefficiencies.
A cornerstone of this strategy is Monthly Collaborative Planning (CDP), an integrated management process designed to support leadership teams in making active, informed decisions regarding anticipated needs and aligning them with defined objectives and financial priorities. This process encompasses:
• Reviewing Customer Demand and Objectives: Routine assessments of demand ensure alignment with organizational priorities while identifying risks and planning mitigation actions.
• Monitoring Financial and Inventory Health: Regular tracking enables optimized financial steering and sustainable inventory management.
• Focusing on Conclusions and Recommendations: Meetings prioritize actionable conclusions and recommendations, with detailed analyses conducted in preparatory sessions.
• Supporting Informative Decision-Making: This process equips management with the insights needed to make strategic decisions that enhance both operational efficiency and sustainability.
The role of planning and forecasting
The CDP process enables planning and forecasting, which are critical to building a sustainable supply chain. These processes allow the ICRC to:
- Collaborate effectively with the right suppliers.
- Select the most appropriate and efficient modes of transport, minimizing reliance on air freight.
- Reduce warehouse waste to the bare minimum.
Several initiatives at the ICRC align with this approach, integrating improvements across warehouse management, supply chain processes, and transport systems.