Adapt your manufacturing to be more lean
The first approach to dealing with uncertainty or fluctuating demand is to adapt your manufacturing process to be more responsive both to upswing and downswings in demand. Flexible just-in-time relationships with your suppliers may allow you to adjust your supplies with relatively short notice – potentially allowing you to match your production more closely with the demand cycles.
Having a production process that can be easily adapted to changing demands requires careful consideration of your fixed costs. For example, you may need to make more use of temporary employees, so that you can adjust your workforce to account both for higher and lower periods of demand.
Late-stage product customizations
Another adjustment that can be made is to consider later-stage customizations to your products. If you have many different versions of your product, and fluctuations across the product lines in demand, you may be able to smooth the overall demand by making a standard base product, customizing it later in the production process to match the versions currently being ordered.
Attempt to gain earlier commitments from customers
Another approach to cope with fluctuating demand is to try and smooth or better anticipate the upcoming orders by gaining commitments from customers. While increasing lead times may discourage customers from making a purchase, it can help you smooth your demand, or have the ability to more easily ramp up your production volumes to take account of increased purchase volumes.
Customer insight - reduce the underlying demand uncertainty
A final approach to dealing with uncertain customer demand is to try and reduce that uncertainty through better forecasting of the likely demand. Gaining insight from customers of their likely purchasing behaviors in advance of their orders may help you anticipate likely demands for your products.
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