What are the elements of demand sensing?

Demand sensing is the translation of downstream data with minimal latency to understand what is being sold,who is buying the product (attributes), and the impact of demand-shaping programs. These three demand elements are then translated into requirements to craft a profitable demand response through internal processes for demand translation.

What does good look like?

The following eight characteristics will help determine success:

  • AccurateThe final demand signal is consistent, with all current information, and is as accurate as possible.
  • Outward facingStrive for near-real-time sensing of channel purchases with the transmission of information about volume sold, price and market conditions, and buyer attributes.
  • A synchronized demand signalGenerate accurate and timely translation of channel requirements into dependent demand at all three levelsstrategic, tactical, and operational planningto craft a profitable demand response.
  • Reduced latency of demand translationTranslate the demand signal through demand networks into design and supply networks to answer questions about the effectiveness of demand shaping, future requirements by supply, and changing market conditions.
  • Translation into network decisionsMake visible the daily impacts of channel sensing on demandand supply-side views on volume, revenue, profit, and mix. Couple this closely to S&OP, supplier connectivity, and new product forecasting processes.
  • ComprehensiveWhile the goal is to include 100% of the channel, leaders have at least 85% of the channel represented in demand-sensing processes. This includes sensing from multiple channels and incorporates cross-channel delivery and return processes.
  • Cross-functionalDemand data is synchronized and shared across functions, based on role-based alerts.
  • PredictiveThrough the use of predictive analytics, downstream data is analyzed and built into channel models for continuous learning by the organization. The focus on continuous learning becomes a core competency of the organization.

  • AMR Research


    What is demand sensing? ( )
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