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Are we missing many significant demand signals?
Companies with periodic demand forecasting, generally once a month, read significant demand signals also only once a month. Any major demand shifts during the month are left to be tackled through inventory buffers and heroic execution (firefighting). It puts pressure on the supply chain execution team, besides resulting in stockouts and surplus inventory.
TOC tackles it through buffer resizing, triggered by buffer penetration. However, it is reactive in nature, as the action is taken after the demand shift has hit the inventory buffers. Many-a-times it leaves little time for the supply chain to respond comprehensively to a major demand shift.
Demand Sensing, on the other hand, tackles it head on by deciphering the evolving demand patterns and resizing the inventory buffers in time. Since many significant demand signals are caused by predictable demand drivers, their directional impact can be captured in Demand Sensing and buffers can be adjusted in advance of the demand shifts hitting them.
The combination of Demand Sensing, Buffer Targeting, and Replenishment make the supply response smooth and timely, thereby avoiding stockouts and inventory surplus.
Here comes the most important question for you. Have you incorporated Demand Sensing into your Supply Chain planning?