Understanding demand management challenges in intermediary food trading: a case study

Abstract

PurposeThe purpose of this paper is to present the findings of a study into demand management practices in a trading organisation. It aims to bring together a number of key principles, including forecasting, promotions management and power, and examine how they impact the operations of the organisation. On the basis of its findings, the paper also aims to propose a framework for efficient use of forecasting resources.Design/methodology/approachA single case study approach was used. Iteratively designed semi‐structured interviews with different departments were used to identify the key challenges facing the organisation. Data analysis was then used to confirm some of the issues and identify emerging issues in the industry.FindingsIntermediary trading organisations in the UK food industry occupy a vulnerable position in their supply chains. For promotional products, in particular, the supply chains are characterised by unmatchable upstream‐downstream lead times and little flexibility in demand and supply requirements. Furthermore, consumers may be getting used to buying certain products only when they are on promotion.Practical implicationsTrading organisations suffer disproportionately from the inefficiencies of their supply chain and, consequently, need to take a leading role in co‐ordinating and synchronising supply chain activities. They also need to understand their supply chain positioning, relative power and the factors that are beyond their control.Originality/valueThe demand management operations and challenges of intermediary food traders have not previously been studied in great depth. The paper provides new knowledge and further contributes to academic thinking by proposing a forecasting framework.