Companies have different motivations for launching promotion programs: Some want to get rid of the inventory in the warehouses, some of them are get paid by the suppliers, some want to increase seasonal balance and some want to do cross-selling. In any case, apart from the good side of the promotion which is increase in profitability (hopefully!) there is a bad part and that's the increase in complexity in supply chain.

Supply Chain Analysis, recently conducted an online poll in which users were asked whether they agreed that more promotions increased supply chain complexity and reduced service levels.

The results show that 47% of respondents believed that this was indeed the case, although 37% disagreed, believing more promotions do not complicate the supply chain, while 16% were undecided.

Some of the characteristics of a good promotion program, in my point of view are the following ones:

1- High level of communication between sales and supply chain department to do the promotion at the time where supply chain doesn't have other big issues.

2- Use the historical data to calculate the effect of cannibalization, better estimate of demand and determine the good time for promotion.

3- Have a plan B in the case demand rises unexpectedly to be able to respond to the customers

4- Work on fast replenishment techniques to fulfill the demand

These were just some quick thoughts. Do you also have some ideas?