Date: 31 Mar, 2021
Can You Predict Your Revenue Risk?
Whether you are a retail company or another type of enterprise selling products, you will always have a revenue target to meet monthly, quarterly, and annually. Yet there is unavoidable uncertainty in any business operation — and businesses must adjust their expectations to unknown variables. There may be unexpected events or sudden changes that threaten your revenue, whether it is the amount, the timing, or some combination of these factors. This is known as revenue risk. Many of these conditions will be out of your control, but there will be some factors you may be able to effectively plan for, respond to, or manage. Being able to manage revenue risk is critical to achieving your revenue goals.
An unexpected revenue risk could be a marketing campaign that fails, an information security breach, or simply prices for your products declining in the marketplace. What about revenue risk in the supply chain? Revenue risk in the supply chain could be any of the following scenarios:
- The bankruptcy of an ocean liner causes millions of dollars of your goods to be stranded in their trans-Pacific journey
- A longshoreman strike at the port delays your goods from making it to the retail shelves
- Stock outs due to inaccurate planning hinders order fulfillment
- Delays at the factory slow down the production of the goods
- Unreliable vendors not delivering the products on time
- Unexpected non-compliance charges levied against cross-border goods
- An unexpected increase in customer orders causing a shortage of supply
Whenever your products do not get into the hands of customers who want them at the right place and right time, it has implications for customer satisfaction, customer loyalty, and future revenue. Revenue risk management for the supply chain means getting a big picture understanding of your supply and demand, and any of the variables that may be keeping you from fulfilling your customers’ orders within a given period of time. There are certain scenarios that past experience can help you avoid; for example, your supply chain team might know if one particular vendor always delays their deliveries or the type of products that are in prime demand in the winter season.
Yet supply chain teams cannot just rely on past data points and on human experience alone — even if that human is an expert. There is also so much that needs to be predicted. You may be thinking about future events, the probability that they may happen, or how several events may converge. Given that many companies have so many product offerings now and deal with shorter product lifecycles, pinpointing revenue risk is more complex than ever before. When there is more complexity and greater uncertainty in the supply chain, it becomes an extremely arduous task for the human brain.
That’s where OpsVeda’s solution for Revenue Risk Management comes in. Based on an AI and automation enabled real-time process focused platform it allows wide ranging flexibility to the enterprise to optimize decisions pertaining to some of the most critical revenue risks it might encounter. Where will the revenue risks appear in the future? What are the patterns that we can distill from the data? What can AI learn from the data to yield valuable insights about revenue risk? You’ll have more power in your hands to protect your revenue and maximize it.
Isn’t it time to give yourself the ability to predict revenue risk so it can be addressed proactively?