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According to research by Aberdeen, in today’s consumer industries, 50% of companies they have surveyed have indicated it takes more than a month to sense changes in demand. This has resulted in an excess of downstream supply chain inventory closest to the consumer. Unfortunately, this inventory is the most expensive as well.

With such a lag in understanding true demand, companies are really in a bind to respond quickly and effectively to change. Inevitably, these companies are going to be faced with disconnects between demand and supply that require a profitable demand response in order to ensure both customer satisfaction and the achievement of operational performance metrics.

Companies need to focus on improving demand sensing and empowering their front-line decision makers with the tools they need to see the impact of changes and to solve problems that inherently come from unexpected changes not originally accounted for in the demand and supply plans. The ability to quickly respond to these unexpected events is proven to drive improvements in both top and bottom-line results.

This entry was posted on Thursday, August 9th, 2007 at 9:13 am and is filed under General News, Risk management. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.