AI & ML
AI-POWERED DEMAND FORECASTING
AI-POWERED DEMAND FORECASTING
In the realm of artificial intelligence (AI) and machine learning (ML), significant strides are being taken that transform traditional operations, particularly in the manufacturing industry. Demand forecasting is a cornerstone of the manufacturing process, playing a crucial role in various aspects of operations. By accurately predicting the quantity of a product that consumers will purchase in the future, manufacturers can maintain optimal inventory levels, optimise production planning, manage lead times more effectively, and mitigate risk.
Having the ability to accurately predict and anticipate on demand is a game-changer and creates a strong competitive edge. Meet Demand Sensing, a brainchild of Elisa IndustrIQ in strategic partnership with sedApta.
Demand Sensing forms an integral part of the all-encompassing Sales and Operations Planning (S&OP) solution from sedApta, setting its sights on elevating businesses through smart, adaptive demand forecasting. We sat down with the engineer at Elisa IndustrIQ who is actively involved in the development of Demand Sensing and the product manager of sedApta, and found out more on this interesting cross-team use case.
Demand Sensing: Rethinking Forecasting
Traditional forecasting methods, largely reliant on historical data, operate under the premise that past performance is an indicator of future results. However, as we have noticed with the Covid-19 pandemic, global disruptions have a major impact on demand and supply. This is where Elisa IndustrIQ and sedApta stepped in and brought the Demand Sensing project to life.
The idea behind Demand Sensing is both simple and powerful: it aims to incorporate a large exogenous data input into the dataset for demand forecasting. This means that any component or variable considered valuable by the customer can be included in the data analysis. This includes diverse datasets based on pandemics, seasonal fluctuations, but also market trends, economic indicators, and weather forecasts.
By assimilating such a broad range of data, Demand Sensing is designed to create a more comprehensive and nuanced understanding of the factors influencing demand. Its algorithm is capable of combining multiple variables detecting fluctuations in demand before they surface, thereby enhancing the accuracy of the forecasts. This approach provides businesses with more accurate and dynamic insights, enabling them to anticipate changes and respond proactively.
Machine Learning at the core
Having listened to the ML-engineer explaining what is happening under the hood of this project, we came to the conclusion that machine learning holds immense potential in the realm of demand forecasting with capabilities extending beyond mere data processing to learning patterns. The ML-algorithm developed for the Demand Sensing feature is a testament to this potential. While it is currently ready to be exploited, it is currently being fine-tuned for optimal performance in production environments. This process involves refining the algorithm to ensure it can effectively handle the vast and diverse data inputs of different manufacturers in different industry sectors.
The power of machine learning enables Demand Sensing to identify patterns and trends in data. It can recognise subtle correlations across disparate datasets that could potentially influence demand. As the algorithm continually learns and adapts to new data, the precision and reliability of its predictions tend to increase over time.
Demand Sensing is not a standalone piece of innovation, it is an integral part of the Sales and Operations Planning (S&OP) suite of solutions offered by sedApta. When businesses opt for this suite, they have the possibility to pilot this ML-infused feature in demand forecasting. This integration is a testament to Elisa IndustrIQ’s commitment to providing cutting-edge solutions that drive operational efficiency and business growth. In essence, the fusion of machine learning algorithms with demand forecasting in the form of Demand Sensing is revolutionising the way businesses anticipate and respond to market dynamics.
Demand Sensing is available and currently being piloted with customers to collect valuable insights of its power in actual manufacturing production environments. As Elisa IndustrIQ and sedApta continue to refine and enhance the Demand Sensing feature, we are excited about the potential it holds. By harnessing the power of AI and ML, we are not just predicting demand – we are sensing it, understanding its nuances, and enabling businesses to respond proactively. This is the future of demand forecasting, and at Elisa IndustrIQ, we are proud to be at the forefront of this revolution.
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