January 07, 2021 | Supply Chain Software
In the initial months of the COVID-19 pandemic, demand planners and forecasters had to adjust to a whole new reality. Supply chains experienced enormous disruptions as demand fluctuated. For consumers, this resulted in shortage of many products such as PPE and toilet paper.
Demand sensing tools provided by next-generation supply chain management software allow forecasters to avoid such chaos – by using real-time data to predict short-term demand.
The key to accurately sensing demand is data sharing between the various nodes of a supply chain. This means collaboration between the organization, its suppliers, and its customers to know what is happening in real time. With that collaboration and data, organizations can shorten lead times and fulfill demand more efficiently.
By utilizing artificial intelligence and machine learning, demand signals from internal and external sources can be aggregated, cleaned, and analyzed much more rapidly than a human with a spreadsheet can do it.
To stay competitive in today’s economy, businesses can no longer simply rely on stockpiling inventory to cope with unforeseen demand. Here are three ways they can manage supply chains amid market turbulence:
Speed and agility are crucial in an economy where customers have a wealth of choices and expect products immediately. Being able to satisfy the need to have it now enhances brand value and customer satisfaction.
When the COVID-19 pandemic hit, demand for products like hand sanitizer and disinfecting wipes understandably spiked. For products like toilet paper, spikes were less predictable, which led to stockouts.
Demand sensing helps enterprises identify such spikes as soon as they happen and reduce the latency with which demand signals are transmitted through the supply chain.
This capacity depends on being able to get data out of departmental silos and collaborating with points of sale partners more closely than ever. This opens a whole new realm of efficiency in how a company fulfills demand.
Demand sensing takes place in the short-term, supplementing – not replacing – longer-term demand planning and forecasting.
With all the data available to supply chain leaders, the ability to collect, process and analyze that information by means of AI-powered software enables real-time demand sensing. And effective demand sensing in turn enables the agility to respond to market signals efficiently, which is key for any business that wants to stay competitive in the digital age.