Email
sinha.rk.dr@gmail.com
Demand Sensing makes Financial Planning more dynamic and realistic.
Companies at the leading edge of Supply Chain transformation are incorporating Demand Sensing in their planning process. It helps decipher emerging demand patterns at the granular level and work out its impact on the overall company operations.
There are several parameters of financial planning which get impacted through changing demand outlook and the resultant supply response. The obvious impact is on sales volume of various products, which does get incorporated in financials.
However, there are several other impacts which should be incorporated. For example, the need to tweak demand drivers to achieve the financial targets. Companies often adjust their consumer offers, trade promotions, discount structures, advertising inputs, and price changes, which have an impact on financials, which should be considered.
The supply response is often in terms of capacity activation, outsourcing, and pre-season inventory build-up. These have an impact on the cost structure as well as inventory, which impact financial planning.
The more dynamic our demand sensing is, the more dynamic its impact on financial planning will be, which makes the plans closer to reality and eliminates unpleasant surprises.