A marketing agency designs a promotional campaign taking multiple criteria into consideration. This includes the promoted product’s current sales volume, gross profit, the estimated incremental gross profit margin to be realized after the promotion, and so on. However, the factor that is largely overlooked is the disruption it causes to the existing supply chain, and the mechanisms required to deal with this.
The root cause of the problem is the “Silo Mentality” amidst departments that results in a restricted flow of information. Consequently, the supply chain is rendered oblivious of the drastic shift of equilibrium point in the demand-supply curve, resulting out of the promotional events.
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