Demand sensing uses advanced technologies like artificial intelligence (AI), machine learning, and real-time data capture to bridge the gap between demand planning and what is happening in your supply chain.
The goal of demand sensing is to reduce the time between an event and the response to that event in order to overcome latency issues. As a result, it assists planners in better anticipating short-term changes in demand. Demand visibility in real time improves forecast accuracy. Demand sensing helps monitors trends and gives predictions so that planners know what to buy and when to ship
Accurate forecasts directly translate into better business decisions, which can ease inventory management, reduce operating costs, and aid in the achievement of key business objectives.
Are you picking the right signals for demand sensing?
Understanding more about customers’ needs and desires can assist supply chain leaders in thinking critically, improving inventory management, and increasing profitability. The current market as well as supply chain circumstances are not by understanding of the term “normal” or consistent. They fluctuate and are influenced by economic, climatic, geographical, and political factors.
Traditional forecasting methods cannot anticipate every nuance of environmental impact on your sources, whether they are goods, services, or suppliers. While traditional forecasting has not been completely accurate, the use of technology today is enabling organizations to create ground-breaking changes in terms of accuracy. Public demand can shift quickly, and businesses must be able to respond with the same speed. All of this information, obtained through demand sensing technology, provides certain technology vendors with a more holistic view of the market, allowing them to project real-time and long-term results that are tied together with lessons learned from historical data.
Many sourcing and procurement solutions now offer demand sensing, which monitors customer behavioral patterns and are capable of broadly collaborating on order pipelines, product lifecycle management, and marketing efforts across an enterprise. However, because there are so many variables, accuracy is critical to effective supply and demand management and is not realistic in non-AI-driven solutions.
With ever-increasing demand dynamism, it is critical to understand what is on the radar to improve: forecast accuracy or service levels (order fulfillment performance). Seek an integrated solution that can model/sense demand as well as safety stock on the same platform, based on service level-oriented policies (stock to service). Safety stock modeling, like Demand Sensing, must be a dynamic ongoing process rather than a static quarterly process, because your long-tail products are as important as, if not more important than, your fast-moving items.
Any company that wants to maintain or expand its current market position in the coming years will need to embrace a connected, real-time supply chain enabled by demand sensing. The rate of change is too rapid, and the number of influencing factors is too numerous, for traditional models that rely on statistical analysis of historical data to remain useful.
With guidance from Pluto7, California Design Den began migrating its database to Google Cloud Platform. Using various GCP products Pluto7 helps reduce inventory carryovers by more than 50%, in addition to improving the accuracy of demand planning quarter over quarter, and gaining granular insights into how individual SKUs are performing.
Pluto7 is taking a lead in solving Supply chain problems across the globe. We have worked with numerous customers solving issues like demand forecasting, inventory management, logistics management and much more which has led us to become experts in what we do.
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