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Are we refreshing the demand outlook or just recycling it?
Most companies, working on monthly forecasts, do have a review process which updates the forecast periodically, say 2 or 3 times during the month. The purpose of mid-month update is to bring the demand outlook closer to reality.
The way this update is done is important. A common practice is to look at month-to-date achievement versus the expectations and extrapolate it for the entire month. For example, if we have achieved 80% against the expectations on 15th, full month forecast is also brought down to 80% of its original value.
This is just recycling the forecast with current status of achievement. While it does add some value, it is far from refreshing the outlook mid-month.
Refreshing the demand outlook is more like rebuilding it from scratch. If the impact of some demand drivers has changed significantly, the models should consider it afresh. If a new demand driver has entered the arena, like competitor product shortage or new promotions, we must consider it as a new demand driver and refresh the outlook.
Demand Sensing works on truly refreshing the demand outlook instead of just recycling it. That’s why it improves product availability and product freshness simultaneously.