SAP Tackles Real-time Demand Sensing

SAP has announced the general availability of the SAP Enterprise Demand Sensing application, with new capabilities to improve companies’ demand management and business planning processes. The idea is to transform supply chains to become demand-driven or even market-driven, whereby supply chain professionals and their marketing counterparts can work more closely together.

Capabilities within the SAP Enterprise Demand Sensing application improve the quality of demand forecasts within the short-term horizon in order to help reduce stock-outs and expediting costs and ultimately boost sales. The application captures historical forecast trends, compares and mathematically blends different forecast sources with demand analytics, and characterizes demand by analyzing historical forecast accuracy, bias, and intermittency trends.

With a real-time view on all market activity, including sentiments from social networks, companies should be able to better sense and shape demand. Marketing should be able to create promotions for products while agile supply chain organizations should be able to ensure rapid response to changes in demand patterns.

The launch of SAP Enterprise Demand Sensing comes on the heels of the recently introduced SAP Demand Signal Management application powered by the SAP HANA platform, which integrates all relevant internal and external demand signals into a single source of truth. With SAP Demand Signal Management and SAP Enterprise Demand Sensing, combined with the SAP Advanced Planning and Optimization (SAP APO) component, SAP now offers a holistic demand management solution for demand-driven supply chains.

SAP Enterprise Demand Sensing is a product for manufacturers to analyze demand patterns to help optimally deploy inventory to their distribution centers (DCs). It integrates to products in SAP’s Supply Chain Management (SCM) portfolio—SAP APO Demand Planning, SAP APO Supply Network Planning, and SAP Enterprise Inventory and Service Level Optimization.

As these manufacturers are shipping products from their DCs to their downstream supply chain—say, to their retail customers—they can better align to the demand patterns by improving short-term forecasts. They can now manage the entire process from demand signal capture, both from structured and unstructured sources, to short-term and long-term forecasting, leading to an eventual increase in sales revenue and decrease in inventory costs. Demand sensing specialists such as Terra Technology and ToolsGroup should be on alert.
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