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Which is the best place to start the supply chain agility journey?
Supply Chain teams often ask me for a good place to start the agility journey. It should substantially improve availability. It should reduce surplus inventory and improve product freshness. It should lead to higher profits for the company.
The best place to start, in my opinion, is at the system constraint. If the constraint is internal, we should make it more agile so that more and more of the right products pass through it.
In consumer companies, the ideal place for the constraint is in the market demand. The whole supply chain, from vendors to consumers, must be synchronized to the evolving consumer demand.
What really causes inventory mismatch is stale and distorted demand signals. Agility at the front end is achieved through Demand Sensing. It tracks actual consumer demand continually at the granular level and informs all supply actions.
Think of it as a Radar which captures real-time demand signals, not the month-old demand outlook. It reduces Demand Latency from weeks to almost zero. Supply chain actions are then synchronized with actual demand. No firefighting. No stress in the team.
Demand Sensing works like the magic potion, which smoothens flow and reduces chaos.