Email
sinha.rk.dr@gmail.com
Replenishment without Demand Sensing is only half effective.
Many companies are moving away from forecast based inventory deployment to replenishment routines. These are expected to minimize the demand-supply mismatch in distribution.
Effectiveness of inventory replenishment depends hugely on how the inventory buffers are set in the system. Several companies set it as a function of their demand forecast. These typically remain static for a month.
Companies on TOC keep it more dynamic, wherein buffers get resized basis their penetration patterns. However, even these systems are reactive in nature as resizing is carried out only after demand shifts start hitting them, leaving little time to respond to any major shifts.
If we want to ensure smooth flow of products, we need Demand Sensing for buffer sizing. It would ensure that buffers are resized proactively, before major demand shifts affect them.
Replenishment without Demand Sensing is only a partial solution, which continues to experience demand-supply mismatch.