Home »
Reading Time: 4 minutes
Supply chain disruptions caused by an unexpected surge in demand, material shortages, and stockouts more often than not catches organizations off guard. The residual impacts of pandemic-induced demand-supply imbalances taught the industry a valuable lesson: anticipating market demand based on historical data is no longer feasible. They must adopt more futuristic and realistic methods of generating and fulfilling customer demands.
Organizations must now assess where current demand is likely to head and implement immediate measures to combat demand-related disruptions. They must implement demand sensing technology, to avoid shortages of products and services across the supply chain. Demand sensing is more than just studying patterns in near real-time data. It incorporates a broader range of demand signals, such as current data from the supply chain, and various mathematical models to produce a more accurate forecast that responds to real-world events, such as market shifts, weather changes, natural disasters, consumer purchasing habits, and more. Demand sensing uses technology that analyses massive data and finds trends, allowing supply chains to get actionable signals and make accurate decisions. It assists organizations in responding to and overcoming unprecedented demand-supply difficulties and developing responsive business plans.
Elevating supply chain performance with Demand Sensing
Earlier, time-series analysis was thought to be a near-accurate way of forecasting. However, as we moved towards a more disruptive market, the traditional strategies were unable to produce accurate results. According to Gartner, many companies spend hours each week estimating sales, but fewer than half of their sales executives and salespeople have confidence in forecasting accuracy. These projections lack the granularity required for retailers and enterprises to account for important demand signals and make prudent sales decisions.
AI-enabled supply chains have the potential to increase inventory levels by 35% and service levels by 65%. Forecasters may utilize decision tree models to learn about supply chain changes and enhance forecasting accuracy for the near future. The solution’s Machine Learning algorithms use real-time data to provide a considerably more accurate picture of the future state. This technique also allows for automation within demand planning, allowing firms to obtain visibility into customer expectations and make improvements efficiently.
In the current volatile economic environment, businesses cannot afford to risk losing customers due to out-of-stock events. In this case, demand sensing can aid in the development of a well-integrated and coordinated supply chain, making forward planning simple.
Compared to standard time-series forecasting methodologies, demand sensing can improve inventory cycle times, reduce transportation costs, minimize forecast errors, and result in improved service levels. Efficient inventory management has the ability to enhance revenues, reduce lead times, optimize costs, and gain more control over working capital.
Demand Sensing – a holistic approach
While the market provides several demand-sensing solution choices for supply chain management, organizations have frequently failed to achieve outcomes owing to severe operational challenges. Organizations seeking to make the most out of their demand sensing solution must adopt a holistic approach throughout their entire supply chain system. This includes integrating their warehouse management system (WMS) into their supply chain, feeding it real-time data from operational and customer sources, collaborating with stakeholders to broaden the data pool for faster and more efficient product replenishment, and partnering with a vendor and supplier ecosystem that syncs with their demand sensing solution. The enormity of the project will require knowledge and experience in deploying a business-wide demand sensing solution to ensure vigilant monitoring, data governance, and customization.
Bolster your Digital Supply Chain with Demand Sensing
As we move forward, demand sensing will be a powerful tool for gaining a competitive advantage. To get the full benefits of a demand sensing system, enterprises should select a unified platform solution that can assist and expedite their data-to-insights-to-business-outcome journey.
Innover’s Digital Supply Chain expertise driven by industry stalwarts is primed to design, execute and deliver holistic demand sensing solutions powered by a deep understanding of data analytics, and different business verticals such as logistics and retail. Forge ahead with confidence in the authenticity of your findings, leading to more accurate projections of client demand patterns, and evolving market dynamics.
Your submission is received and we will contact you soon
Leave a Reply