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If you have updated your demand outlook, would you still use the stale forecast for supply planning?
The answer to this question looks obvious. If we have better estimation of near time demand, why should we continue to depend on the old stale forecast? Unfortunately, that’s what happens in most supply chains today.
The reason is simple. Frozen forecasts. If forecast is frozen, no one can change it. Even if the demand looks 50% higher or 50% lower. Production schedules are frozen, unable to accommodate the demand shift. Vendor schedules have already been communicated, difficult to change now.
What’s the use of updated demand outlook in such a scenario?
It only creates stress in the team. They spend most of their time firefighting.
The solution is simple. If we have updated the demand outlook, let’s use it for supply execution.
Demand Sensing works best when it is coupled with flexibility and responsiveness in the backend operations.