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How quickly can you decipher a shift in demand pattern?
If we are working to make our supply chains agile, it is important that we decipher any change in the demand pattern as fast as possible. That’s why it is recommended that the agile supply chain design should start with agile demand sensing.
Most companies measure the demand shift in terms of variations in actual demand from the forecast quantity. Since the forecasting process in S&OP is monthly, the demand shift is normally detected at the end of the month. More progressive companies have a weekly review to check if there are indications of an emerging demand shift.
This latency of a week or a month is a major obstacle in making the supply chains more agile. Moreover, manual reviews have limitations in identifying patterns in demand shift, especially at the most granular level.
AI/ML based agile demand prediction methodology, executed at the most granular level and refreshed every day, can decipher the patterns much faster and help in designing a truly agile supply chain.