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Why is Demand Sensing gaining importance in running today’s supply chains?
Consumer demand in most industries is getting more and more unpredictable, as competition intensifies, new products proliferate, new selling channels emerge, and consumers have a wider assortment to choose from. It is a secular trend, expected to continue.
Unpredictability of demand implies that the sales and operations plans get stale much faster, as demand shifts. If we are still using a 30-day old plan for supply execution, we are bound to meet with stockouts and surplus stocks. What we really need is frequent refresh of the demand outlook. How do we get that?
If we want to improve our near term demand outlook, we must know the current state of demand, decipher its evolving pattern and make intelligent predictions for the near term future, considering various demand drivers in play during the planning horizon.
That’s exactly what Demand Sensing does.