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Is your demand signal pristine or distorted?
Agile supply chains use Demand Sensing at the front end to get a reliable demand signal. The choice of demand signal has a significant impact on the effectiveness of their pull based replenishment planning.
Most of the demand signals that companies use are distorted to some extent.
Primary and Secondary sales as a demand signal are distorted on two counts, stock availability and the ability to push. Similarly, distributor and retail orders are often distorted by stock availability as well, as they check the stocks available at the source before placing their orders.
We should be careful about these signal distortions and have a mechanism to correct for them.