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Predict, Not Just Respond

High Velocity Demand Planning

High Velocity

One thing we may have learned from Covid-19 pandemic is that the velocity of the supply chain is central to on-time delivery. But speed is not only on the supply side, it is also on the demand side. How quickly do you know about potential shortages and or increase in demand?  In the early stages of Corona virus, things were changing by the day if not by the hour regarding both short and long term demand sensing for PPE. Monthly demand planning is obviously inadequate. By the time you know what you need and tell your suppliers, demand has already changed and you are left with shortages. Performing demand sensing based on daily and weekly data, one can immediately respond based on developing trends. Daily trend changes are different from weekly and monthly. By combining such trend changes one can conclude a much better prediction of what is needed and by how much and when there is a chance of potential shortage.

Even under “normal” circumstances, more frequent demand planning can be of value. Our clients in the high tech sector need to identify trends and make changes to product mix as soon as it is detected.  Although long term demand sensing enables them to subcontract the right components that have long lead times, short term demand sensing is required to quickly change product mix in packaging even before orders exceed the S&OP forecast.  To this end, deploying a higher velocity demand planning process which looks at orders daily provides significant value.

For more information on high velocity demand planning click HERE.

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