Discuss your views on the role that demand forecasting plays in Sony’s supply chain strategy. Tell us the factors that make a demand forecasting necessary, and how Sony is able to be more responsive to its customers due to this SCM strategy.

Demand forecasting helps Sony to estimate the demand in the near future and prepare themselves to cater the demand. In this regard, the Sony uses demand forecasting to establish the demand and bring the necessary resources and capabilities to the organization. For this purpose, the company readies its supply chain partners such as supplier and distributors and retails to prepare and cater the demand while maintaining the suitable capabilities. Managing inventory with adequate level also relies upon the demand forecasting. So, the demand forecasting plays an important role of bringing the necessary flexibility, preparedness and efficiency in the supply chain according to the changed market scenario. Hence, it helps the company to readjust the supply chain strategy in the wake of a market demand in near future.
There are following factors that make demand forecasting to be necessary.
1. Volatility and instability in demand that cause the company to come up with the forecasting of demand
2. Changing tastes and preferences that can shift the demand, so regular demand forecasting is necessary.
3. Entry of new players in the market that can take away the market share from the established brands
4. Globalization and its impact upon the changing government regulations
Sony has brought the element of adaptability, flexibility and higher level of efficiency in its supply chain network on the basis of demand established by the forecasting. Further, the research team also establishes the trends going on in the market and come up with the new models of the product to cater the demand. It galvanizes the whole supply chain and company succeeds in the marketplace.
 
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