Improved forecasting through demand sensing and real-time data
- November 28, 2023
The demand-sensing tool reshapes the relationship between clients and their customers’ supply chains. This revolutionary technology uses real-time data and precise information to forecast future orders and fulfillment trends. This intelligence allows businesses to better anticipate customer needs and resolve common problems along their supply chain.
Proactive inventory planning needs real-time data
Traditional forecasting methods will soon no longer be enough. Demand sensing breaks free from past trends and provides a new way forward, delivering satisfaction at every step. Using real-time data, advanced algorithms and automation allows for more accurate predictions of future product demand. These reduce inventory levels and increase the potential for remarkable customer experiences.
Demand sensing is a complex process requiring more than basic data points to generate an accurate forecast. Customer orders, point of sale information and current production figures are vital for understanding market trends. But what sets demand sensing apart from other forecasting methods is its ability to access unconventional sources, such as real-time weather patterns or sudden market shifts. This comprehensive approach helps create precise predictions of future events across multiple industries and enables proactive inventory planning.
Supply chain disruptions in the past were extremely difficult to navigate and respond to, but demand sensing and forecasting can predict these events in real time. Forecasting real-time disruptions helps organizations anticipate and navigate future scenarios effortlessly — avoiding any potential implications.
A use-case for demand sensing: weather patterns
To help a client improve its customer service and assess its branch and distribution center inventory, NTT DATA used demand sensing.
We used weather data to help us understand how much people will buy in the future. We received weekly sales reports from the manufacturer and turned that data into daily information and matched it with weather data. We're still learning how to optimize demand sensing and training our models. Some of our current use includes collecting information about the weather, figuring out how different online retailers operate in different areas.
Demand sensing is driven by data science and advanced modeling. As you invest in training AI-based models, you continuously improve the outcomes. A business can only move as fast as its supply chain. By incorporating demand sensing into your demand planning process, you can take advantage of information faster and position inventory to meet customer orders. You’ll also avoid losing business to competitors, reduce costly expedites, reduce inventory movement between distribution centers and minimize backorder situations. Data and technology are coming together to create new capabilities.
Demand sensing and weather have an immediate impact across industry verticals. From consumer-packaged goods (CPG), food and beverage, to the construction industry, weather plays a role in customer purchases.
The benefits of demand sensing: reduced errors, increased revenue and satisfied customers and employees
Demand sensing is revolutionizing the way we predict consumer behavior. Its implementation has had an impressive effect on weekly forecasting accuracy, reducing errors by up to 50% for certain product lines. By avoiding restocking items that lack consumer demand, clients can now put their precious capital towards achieving maximum revenue — a savvy decision to help create long-term success.
With automated demand sensing, businesses can free up staff to focus on expanding their brand. They can accomplish these while making sure that inventory is accurately predicted. In addition to boosting productivity, this technology also helps reduce costs associated with shipping, handling, storage, as well as environmental impact.
Organizations can significantly improve inventory planning and gain many financial benefits using demand-sensing technology. This sophisticated system can reduce the margin of error in plans by up to 40%, leaving more capital available for ordering higher-profit items.
Find out how demand sensing can help your business
At NTT DATA, we understand the importance of finding innovative solutions to help you boost your business analytics. That’s why we offer demand-sensing technology that allows for streamlined consumer interactions, freeing valuable resources and paving the way for enhanced success.
