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Impact of ‘Leap Year’ is often ignored in Supply Chain planning.
Today is a special day which reminds us that 2024 is a leap year. Does is have an impact on Demand Planning?
Many progressive companies have moved to Demand Driven Supply Chain. They have daily demand sensing with a daily refresh. Their planning systems are robust to account for the impact of leap year.
However, most of the companies are still operating their legacy systems with monthly demand planning. Their forecasts are influenced by the recent trend, seasonality and various other demand drivers. Their model is likely to ignore the impact of leap year, unless it is added as an additional demand driver (rarely!).
The message is simple. If we continue to use the legacy systems of demand planning, we must include leap year as a demand driver and use at least four years of history. Better solution is to go for AI/ML based Demand Sensing engine, predicting daily demand at the granular level, with a daily refresh.
The choice is yours…