Abnormal Demand

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  An unusual, uncommon or irregularly high product demand that is outside the normal parameters established by the management policy is called an Abnormal Demand.

  Abnormal Demand can occur for many different reasons.  Some being that it may occur due to a promotion, price break, end of the year sale, substitution or even a customer whose own demand may be irregular.  In other words, abnormal demand can emerge from a new customer/existing customer whose demand is either increasing or decreasing.  Managing abnormal demand can be a challenge for supply chain and operations professionals.
Example

• A manufacturer was asked to supply parts for a military project. The project required 6,000 different SKUS that had never been made before.  Such a request had not been planned nor had it been performed before. The downside of this abnormal demand is the disruption that it causes in the normal production.  In addition to this the organization will need to re-plan the entire manufacturing schedule to meet the needs of this urgent military project.  So, whats the upside?  This Military project will create a massive increase in the revenue of the organization.  It will also strengthen the alliance between each organization and support the needs of the Military project. 

Challenge

• So,  what do you think?  Should the company accept the urgent Military project?  Share your thoughts in the community, comments or upcoming assignments and receive a coupon for one of Lean Strategies International LLC's Training Courses.