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Lag between actual demand shift and the requisite supply actions is a major reason for inventory mismatch.
We know that the actual consumer demand at a granular level has high level of variability, which requires placing strategic inventory buffers at certain nodes in the supply chain. Moreover, there are fundamental changes in demand pattern, which are relatively more difficult to decipher.
Demand sensing tools help in identifying these underlying patterns on a dynamic basis. Some companies depend on syndicated demand data to understand these patterns. However, such data are quite slow in picking up a shift. Our own sales to retailers also pick up these shifts, but with a definite lag.
The best source to pick up these patterns is the actual consumer offtake data from retailers on a daily basis. However, it is quite difficult to get it in India where organized retail contributes to only a small part of the overall consumer offtake.
We should be sensitive to the inherent demand latency in these demand sensing methods and move to the ones with lower latency.