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Demand sensing adds further nuance
Whereas demand signals, such as purchase orders, carry a level of certainty, demand sensing is much more nuanced. It looks at the wider context of your OEM business to proactively shape purchasing decisions ahead of the curve. And yes, it too requires humans in the loop.
Imagine you are working on a new project and looking to use a new part. You would typically do some sampling, then go through a couple of rounds of prototyping, followed by qualifications. Once you are confident the product works, you would move into low-volume, pre-series production, to create units for more extensive testing. If this all goes to plan, you would then be looking to ramp up production, which, depending on the industry you are working in, could last for years.
In this situation, demand sensing would look ahead during the prototyping stage to understand when you are expected to move into pre-series and then series production. Systemically, these will be overnight switches. And the latter transition will result in you quickly going from needing relatively few parts, to potentially hundreds
there any high-risk issues or unknowns still needing to be ironed out?
Automation and AI still need the humans
of thousands. Demand sensing helps ensure you are prepared by looking beyond the typical signals. For example, if your supply chain partner knows your project is likely to move into series production within six months, and is aware that lead times for some parts you require are lengthy, or that a supplier requires a pipeline-fill to be able to lock in the necessary capacity at its suppliers, your partner can take action. This could be to step in as the distributor to pre-
position supply, to ensure you get the parts you need, when you need them. One key thing to keep in mind is that demand sensing is an art rather than a science. A quality issue that arises during the final round of prototyping may lead to the whole project being cancelled. This is why a proactive supply chain partner that is looking to demand-sense will be talking to your engineers, as well as potential suppliers, to assess confidence levels. Are
What all of this shows us is that with the economic situation as unstable as it currently is, automation and AI on their own are not (yet) the complete solution to modern supply chain optimisation. This, of course, risks putting the OEMs in question at the back of long queues with their suppliers, meaning they might not be able to secure the products they need when they need them. So, until such time as AI develops to a point where it is able to reliably make nuanced judgements such as the ones we have outlined above, we always advise OEMs to complement their automated and AI-enabled supply chain systems with human intelligence. Because ultimately, when you are looking to truly optimise your supply chain for the modern economic environment, it’s this blend of intelligent people and advanced supply chain management software that will give you the best results.
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Components in Electronics
September 2024 41
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