At Firstshift.ai, we’re dedicated to helping businesses unlock the full potential of their supply chains. One of the essential components of modern supply chain management is Demand Sensing. Learn more about how this is critical to supply chain performance and why it’s a game-changer for businesses of all sizes.
What is Demand Sensing?
Demand Sensing is the art of accurately predicting short-term demand by harnessing real-time data and advanced analytics. It empowers businesses to “sense and respond” to changing demand signals, ensuring that their supply chain is agile, efficient, and in tune with market dynamics. It also helps CPG brands capture revenues and margins that they may otherwise be “leaving on the table”.
The Power of Accurate Demand Management
Accurate demand management is at the heart of efficient supply chain management. Here’s why Demand Sensing is a game-changer:
Significantly Improves Forecast Accuracy: Research from the Institute of Business Forecasting (IBF.org) shows that for every 15% improvement in forecast accuracy, there’s a 12% reduction in inventory. Your read that correctly – the benefits are tangible.
Reduces Inventory Costs: With more accurate forecasts, companies can optimize inventory levels. According to IBF.org, a 15% improvement in forecast accuracy can result in a 3% or higher pre-tax net profit improvement.
Enhances Customer Service: Meeting customer demand with precision leads to improved customer satisfaction and loyalty, increasing repeat business and positive brand reputation.
Agile Supply Chain: Adjust production and distribution plans swiftly in response to changing market conditions. This agility is a critical competitive advantage.
Boosts Profitability: By reducing carrying costs, optimizing inventory, and increasing sales, Demand Sensing enhances overall profitability.
Captures incremental revenue: By accurately predicting short term demand, CPG companies can capture incremental revenue from their most profitable channels.
Challenges and Solutions
Demand Sensing does come with its challenges, such as data quality, integration complexities, and resource requirements. Each channel may provide data in different format, frequency and at different levels in the product and location hierarchies. Normalizing the data to allow for algorithmic demand sensing and forecasting is not a trivial endeavor. Firstshift.ai provides a cloud-based, AI-driven solution to overcome these challenges, making it accessible to businesses of all sizes.
Demand Sensing is a critical element for supply chain performance. It not only ensures better inventory management and customer service but also contributes to higher profitability. The time has come for businesses of all sizes to embrace this transformative AI-driven demand sensing technology and unlock your market potential.
Ready to Transform Your Supply Chain?
If you’re ready to make the smart shift to AI-powered Demand Sensing, it’s time to schedule a call with the experts at Firstshift.ai. Let us show you how you can boost your forecast accuracy, optimize your inventory, enhance customer service, and ultimately increase your profitability. Your journey to a more responsive supply chain starts here.