The COVID pandemic was eye-opening for many, especially for consumer goods companies that failed to match a surge in demand for necessities amidst panic buying. The global health crisis is gradually dissipating, but its aftershocks are felt far and deep in the supply chain network. The vulnerability and incompetency of traditional demand planning methods glared at our faces, compelling many enterprises to turn increasingly to more advanced tech-based solutions. Demand sensing emerged as the best bet to prevent the demand-supply value chain from falling apart in the face of similar situations.
A demand sensing solution leverages the power of AI and other technologies to predict near-future demand by aggregating real-time data. It helps overcome latency issues by reducing the time between an event and the response to the same event. Therefore, this approach is ideal for short-term forecasting sales.
Demand sensing tools consider a range of internal and external factors influencing consumer purchase behavior, such as POS data, anomalies in the supply chain, global emergencies, weather trends, economic trends, etc. These factors constantly shape and reshape the demand for goods and services.
On the other hand, traditional demand planning relies heavily on historical data and individual, often biased, opinions of experts which are helpful when predicting long-term sales.
But history doesn’t always repeat itself, especially in the short term. Hence, understanding the demand for goods the following day depends highly on selling the same items the previous day. Therefore, demand Sensing is the only way to predict short-term fluctuations in the market and sales.
An AI-powered solution like TradeEdge Demand Sensing aggregates real-time data about product sales and inventory across multiple channels. Such actionable insights improve visibility at the empirical level helping planners to understand what is selling, where and at what speed. In addition, it allows for accurate anticipation of short-term changes in demand and forecasts sales with utmost accuracy.
Digitization of supply chains: For any organization, its network of suppliers and distributors is a backbone, supporting the enterprise’s objective of engaging buyers with quality and timely delivery of goods/services. Hence, a seamless flow of communication about what is happening at the suppliers’ end is crucial to prepare for sudden surges in demand for existing or new items. AI-enabled demand sensing solutions can easily break the existing silos by onboarding all concerned parties on a single digital platform. And digitizing on-ground data allows for timely availability of actionable insights into data lakes. Hence, demand planning becomes more accurate, refined, thorough, and ongoing.
Unified view of supply chains: A unified view of sales across all channels is crucial to help enterprises stay market ready all the time. Demand Sensing allows for data digitization and easy accessibility to empower planners to identify the extent and intensity of stock-outs, phantom inventories, and display voids. Hence, they can use more effective measurement and deployment of funds and resources to keep up with the ongoing demand.
Availability of multiple datasets: Existing silos between departments prevent the timely distribution of critical information needed for decision-making. Hence, an all-inclusive view of datasets is paramount for an accurate sales forecast. Since AI works best in the presence of data, the same technology is used to automate the data extraction process from related and unrelated, unstructured, and semi-structured data streams. In addition, AI takes the time and labor factor out of the process, ensuring real-time information about changing market trends is available on time to prepare for the new demand.
Accurate consumer behavior forecasting: Another unique benefit of a demand sensing solution is evaluating the pattern of customer purchase behavior from various sources, including POS data, customer feedback, and online activities. Buyers always demand something better that adds value to the price they pay. Timely anticipation of such behavioral patterns helps companies to make adjustments in the product features on time to foster better satisfaction and engagement with their services. It also gives the company an edge over competitors in the market.
Make more reliable short-term forecasts: Since demand sensing considers various influencing factors and real-time insights to predict short-term sales, the forecast accuracy increases manifold. As a result, companies can stay responsive with timely adjustment of replenishment plans and adequately cater to optimal ordering.
Demand sensing solutions are a game-changer, helping unlock unlimited possibilities by building connected, value networks that support the overarching business strategy, improve operational efficiency, and create new revenue opportunities.