New Perspectives on the Value of Demand Sensing

Last holiday season, many retailers and their suppliers were shocked by 11th hour shifts in demand, with much of the surprise coming from a surge in e-commerce orders. As recently as a decade ago, it wasn't unusual for businesses to be hit with much larger or smaller orders than they had been expecting -- and for those orders to arrive earlier or later than anticipated. But since then, the discipline of forecasting has improved markedly, with mathematically tractable models providing more useful predictions of demand. With the rush of so-called "big data" -- notably the escalation of real-time data -- now available for demand forecasting, new toolsets are required to drive advanced inventory planning. Demand sensing technology has already been adopted by companies that are recognized as having the most progressively managed supply chains. Indeed, investments in demand sensing solutions are growing more rapidly than supply chain spending in general.