Monitoring new product introductions with sell‐through data from channel partners

Manufacturers of consumer goods need to see the market situation and end customer demand in order to efficiently allocate production capacity and procure materials. However, the difficulty to obtain timely and accurate demand data from the point‐of‐sales (POS) calls for alternative solutions to be developed. This paper presents a solution that is based on readily available sell‐through data from channel partners, such as distributors, to monitor what happens on the market in product introduction situations. The difficulty with using demand information from distributors rather than the POS is the bullwhip effect that distorts demand as you move upstream in the supply chain. The paper presents how this problem can be overcome by using market mix views of product categories and simple smoothing techniques.