Supply chains are having to deal with uncertainty now more than ever—here are 5 ways that demand sensing is helping them manage it.
Today’s supply chain’s success is marked by the speed at which it can respond to the demands placed upon it. Companies have to be able to deal with the unexpected. Fast. There can often be sudden changes in what customers want. And it’s up to companies to have their supply chains sufficiently prepared for them. As such, technology has become central to the strength of supply chains. Specifically, with demand sensing, companies have a technology that gives them an opportunity to react to customer demands with greater speed and precision than before.
Demand sensing is an incredibly accurate way of forecasting. It’s a software that uses close to real-time data to give companies a picture of upcoming demand. With it, companies are put in a stronger position to deal with short-term fluctuations in the needs of their customers. Improving their supply chain planning and resilience.
An article of demand sensing by Supply Chain Brain explains,
Demand sensing, as the name implies, is essentially the art and science of picking up on short-term trends immediately, in order to better predict what consumers will want.
This article by Morai Logistics covers 5 ways companies can be leveraging demand sensing to bring clarity to their supply chain operations.
Boosts Upstream Planning
One of the most important points of information that companies get access to via demand sensing is point of sale data. By having this data, companies can know the state of their materials and products immediately. This in turn allows those in the manufacturing sector of companies to further fine-tune their forecasting without relying on others in the supply chain.
Helps Keep a Closer Eye on Inventory
The earlier mentioned Supply Chain Brain article highlights demand sensing’s impact on inventory,
Continually fine-tune upstream inventory. Demand sensing helps to dynamically optimize inventory and balance the network by factoring in inventory available in regional warehouses, along with predicted customer demand, by location.
What this means is supply chain managers can have a clearer view of their inventory in all its various locations. This results in supply chains being run more efficiently, avoiding waste, and being primed to be able to respond to customer demands.
Creates Balance Between Inventory and Sales
Inbound and outbound teams have opposing objectives. The inbound team wants inventory fully stocked. Whereas the outbound team wants everything sold. Both of these goals are critical to a healthy supply chain. However, if they don’t reach some degree of equilibrium it can spell trouble. Demand sensing helps avoid that by presenting a fuller, unified image of the needs of customers.
Makes Seasonal Demand Easier to Tackle
The products a company sells can change greatly by the season and the corresponding demand can too. Thus, the change of each season can be a testing time for supply chains, as they attempt to adapt to those changes. With the assistance of demand sensing, that’s easier to manage. This is because of the near real-time nature of the data collection and feedback. If any item is selling below or above expectations, companies can know immediately and respond accordingly.
Ensures Inventory Matches up with Product Lifecycles
Every product companies put out there are only going to be sold for so long. Each product has a lifespan. A point at which demand dwindles. And it’s up to companies to anticipate and plan for the lifespan of each product they put on shelves or deliver directly to customers. Once again, demand sensing makes this process simpler. Primarily by giving companies such accurate and quick feedback.