The Halloween Supply Chain

There are certain jobs within the supply chain and procurement industry I’m glad I haven’t jumped into. One, in particular, is the demand planning for the $9B of spend on Halloween products.

Halloween, like any holiday, creates significant seasonal surges for specific product categories. Which makes demand forecasting absolutely ridiculous. But, what does that mean for the end consumer?

Well, when I walked through Target the other day – as always there was an excess of candy available on the shelves. But the costumes, decorations, and everything else were GONE (before the Holiday started too!). So who in Halloween Haunted House is to blame?

A Halloween Supply Chain Blame Game?

So who can we point the finger at for this mistake? Was it Frankenstein who makes the massive amounts of candy? What about the Wicked Witch of the West who does demand planning for the stores?

Was it the blue buggy-eyed buyer that was worried about the holiday being canceled because of covid, he decided to order half of the usual decorations? Or maybe it’s just a crazed ghoul getting into all the supply chain planning systems who has a thing for chocolate.

Because even if we didn’t have the pandemic, there’s always the stress of getting the right amount and types of candy, costumes, decorations, to the store in time (without overdoing it). Holidays in general place stress on supply chain planning processes and teams.

Especially when the cost of over forecasting is severe. If you don’t sell holiday products before the holiday, they will be heavily discounted for 50-75% off the day after. And I’m pretty sure retail has some thin margins, to begin with (so this doesn’t help!).

Now, if you’re like me as a consumer, you absolutely LIVE for these sales! I swear I’ve rarely ever bought an Easter, Halloween, or any other type of decoration prior to the actual holiday. I always wait until after and stock up at a fraction of the retail cost for the next year. So I, therefore, quite love and appreciate how hard demand forecasting can be!

At the same time, I do realize this isn’t great for the holiday industry as a whole. So then how do we balance so there is no shortage of candy supply? How do we make sure Sally can buy her cute little Disney Princess costume in her size without being stuck with 25 more after the holiday happens?

The Zombie and His IT Solution

That’s right, the zombie has the answers. He’s spent many years in Supply Chain Planning and Forecasting to ensure proper demand planning. And what does he rely on to do this? Well, he’s got an IT-based solution called an advanced integrated supply chain planning system.

Which comes down to the ability to create an accurate demand plan. Fun! Then, the Zombies be able to get the products/inventory there in time to meet demand by location. Which if you ask me, is exactly why I am happy to work with indirect procurement! Supply chain planning is brutal.

Just think, if you have a gang of demons buying up all the angel costumes, you need to be able to adjust (and quickly!). Cue song… “You’re the Devil in Disguise.”  You will need to be able to quickly change when the gang arrives and messes up all of your projections. Jerks.

Holiday supply chains, therefore, need to quickly shift to meet real-time market demand. Yikes! Which from my perspective is close to impossible. But I apparently, was very wrong as it is very possible!

Technology such as Multi-echelon Inventory Optimization (MEIO), for example, can determine the best locations to send inventory. Cool. The caveat, however, as we all know due to COVID or unplanned crappy events happen and things literally go to hell.

Planning for holidays bonanzas like Halloween can be more anxiety-inducing than watching the Exorcist or Friday the 13th, but if you have the right tools, the surplus/shortages should be less severe. Which makes me think… I just blogged myself out of some amazing clearance deals!

Source: CandyStore.com.

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