Alignment demand management

Figure 1 Supply-Demand Misalignment. (From J. Gattoma, Ed., Strategic Supply Chain Alignment Best Practice in Supply Chain Management. Reprinted by permission of the publisher, Gower Publishing, UK.)...

The change in demand forecasting processes is a major change management hnrdle for the traditional supply chain. The shift from a focus on history to a focus on market drivers, or to align on demand assumptions versus debating nnmbers, is a cnltural redefinition. 

In the evolution, the vertical silos of supply become connected through horizontal processes. The most common horizontal processes are revenue management, sales and operations planning (S OP), supplier development, and corporate social responsibility (CSR). (This transition is covered in great detail in Chapter 5.) These horizontal processes become connectors for the end-to-end value network. They align the traditional supply processes of source, make, and deliver against a business strategy. When companies successfully build market-driven value networks, demand and supply volatility can be traded off bidirectionally... 

Plan (13) 1.1 Supply Chain Planning (7) 1.2 Supply/Demand Alignment (4) 1.3 Inventory Management (2)... 

J S OP vendor The bottom line fora [Company] implementation is to help our customers derive value from their supply and demand chains. By improving forecasts, cutting planning cycle time, aligning the enterprise, and enabling more proactive management our customers have realized ROI on their [Company] investment in less than 8 months from the go-live date. As such, an investment in [Company] can be implemented and pay for itself well within a year. 

On the other hand, concentration on cost minimization as a single objective will lead to reduced variety to minimal mode (8 varieties) which is unexpected for managers and cannot meet the customer satisfaction and market demand. The results distinguish existent trade-off between objectives clearly and accentuate that product variety goal should be considered as multi-objective model. In fact, the model with optimization objectives under constraints has provided the best results inclusive fewer costs, higher product variety and quality in which aligned with decision maker s preferences. 

Executive management is facilitated as all functional decisions are aligned around a common set of demand expectations. Early warnings can be reviewed when current projections fall below the plan and the capture of new growth increases as the firm learns to stay in sync with current business conditions and activities. 

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