Demand Latency
Demand latency is the time from channel purchase to demand translation of channel replenishment to drive order to an upstream trading partner.
Demand Latency
While most companies believe that an order is a good predictor of demand, the increase in the supply chain's long-tail increases demand latency. With product proliferation, globalization, and micro-segmentation, demand latency dramatically increased over the past decade.
For a turn item at a mass retailer, like Wal-Mart, the demand latency is twenty days, while for a long-tail product, the demand latency can be over one hundred days.
As a result, the order is not as good a predictor of demand as ten years ago. As a result, increasingly, the order is out of sync with the market.
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