How do you communicate and collaborate with other stakeholders on demand planning risk management?

1 Define the risk framework

The first step in demand planning risk management is to define the risk framework, which is a set of principles, tools, and methods that guide the risk identification, assessment, and mitigation process. The risk framework should be aligned with the corporate strategy and the supply chain objectives, and should consider the internal and external factors that can affect the demand and supply. You should communicate and collaborate with other stakeholders to establish the risk framework, such as the risk categories, the risk indicators, the risk thresholds, the risk scoring, and the risk reporting.

2 Identify the risks

The next step in demand planning risk management is to identify the risks, which are the events or conditions that can cause deviations from the expected demand or supply. You should use various sources of information, such as historical data, market research, customer feedback, industry trends, competitor analysis, and supplier intelligence, to identify the potential risks. You should communicate and collaborate with other stakeholders to validate and prioritize the risks, such as the likelihood, the impact, the urgency, and the interdependence of each risk.

3 Assess the risks

The third step in demand planning risk management is to assess the risks, which is the process of quantifying and qualifying the risks based on their probability and severity. You should use various techniques, such as scenario analysis, sensitivity analysis, simulation, and optimization, to assess the risks. You should communicate and collaborate with other stakeholders to share and compare the results of the risk assessment, such as the risk exposure, the risk distribution, the risk trade-offs, and the risk gaps.

4 Mitigate the risks

The fourth step in demand planning risk management is to mitigate the risks, which is the process of developing and implementing actions to reduce or eliminate the risks. You should use various strategies, such as risk avoidance, risk reduction, risk transfer, and risk acceptance, to mitigate the risks. You should communicate and collaborate with other stakeholders to agree and execute the risk mitigation actions, such as the contingency plans, the safety stocks, the contracts, and the insurance.

5 Monitor the risks

The fifth step in demand planning risk management is to monitor the risks, which is the process of tracking and measuring the performance and effectiveness of the risk management process. You should use various metrics, such as the forecast accuracy, the forecast bias, the service level, and the inventory turnover, to monitor the risks. You should communicate and collaborate with other stakeholders to report and review the risk management outcomes, such as the risk incidents, the risk deviations, the risk savings, and the risk improvements.

6 Learn from the risks

The sixth step in demand planning risk management is to learn from the risks, which is the process of capturing and applying the lessons learned from the risk management process. You should use various methods, such as root cause analysis, feedback surveys, best practices, and benchmarking, to learn from the risks. You should communicate and collaborate with other stakeholders to update and improve the risk management process, such as the risk framework, the risk identification, the risk assessment, the risk mitigation, and the risk monitoring.