Logistics and Supply Chain Management, 6th Edition

Improving visibility of demand

In many cases, companies have an inadequate ‘visibility’ of real demand. By ‘real’ demand we mean the demand in the final marketplace, not the ‘derived’ demand that is filtered upstream through any intermediary organisations that may lie between the company and the final user. The challenge is to find a way to receive earlier warning of the customers’ requirements. What we frequently find is that first of all the demand penetration point is too far down the pipeline and that secondly, real demand is hidden from view and all we tend to see are orders. Both these points need further explanation; firstly the concept of the demand penetration point.

The simplest definition of the demand penetration point is that it ...