Demand driven supply network

Asgekar V (2004) The Demand Driven Supply Network. Supply Chain Management Review April 2004 15-16... 

Over the past years, to effectively manage the volatility in demand, companies across a wide range of industries (e.g., automobile, fashion, etc.) have adopted demand-driven supply networks, using the pull of actual customer demand, rather than the push of available supply, to manage their network of suppliers, materials and components from manufacturing to distribution to improve supply chain efficiency while simultaneously meeting customer service requirements. 

AMR (AMR Research report 2005) defines the term Demand Driven Supply Network (DDSN) as a system of technologies and business processes that sense and... 

Demand Driven Supply Networks Advancing Supply Chain Management (2006) SAP Insight... 

Donnelley, R. (2007). The role of product completion in a demand-driven supply network. Chicago. http //www.werc.Org/assets/l/workflow staging/Publications/673. PDF... 

In Demand Driven Supply Chain companies, processes are built from the outside-in, which means, they are based on a clear view of the customer, what is important for them and the requirements for account profitability. These companies become zealots on new product introductions and use their supply networks to shape and respond to demand. 

One of the key characteristics of demand driven supply chains is the ability to read and sense the demand, and have an agile supply network capable of reacting very... 

A demand-driven supply chain where product is built to order rather than forecast. This required shorter lead times and a simplified supply chain network. 

Traditional supply chains are operationally disconnected and reactive to demand. Demand volatility and operational complexity require supply chains to become more resilient. Market-driven value networks begin with conscious choices that integrate and synchronize supply with demand channels and product portfolios. 

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... 

Each technique is important, but they are not equally important for all supply chains. There needs to be a choice. While all are great concepts to drive manufacturing improvements, the question is. How to put them together And how do they fit within the road map to build a market-driven value network Should companies use these techniques to redefine manufacturing to be more responsive to both buy- and sell-side market demands The answer lies in understanding the rhythms and cycles of the supply chain and using these techniques to design the appropriate supply response. 

The horizontal processes in stages 3 and 4 are foundational to build market-driven value networks. This technology portfolio helps companies to sense and shape demand and supply bidirectionally between sell- and buy-side markets. This process of bidirectional trade-offs between demand and a commodity market is termed demand orchestration. This capability allows companies to win in this new world of changing opportunities and supply constraints. It is especially relevant with the tightening of commodity markets. 

Supply chain excellence has evolved. The definition has morphed from the efficient supply chain to a market-driven value network. Today, the concept of a market-driven value network is largely aspirational. It is a new goal. As supply risks and costs have grown, companies realize that a demand-driven approach is not sufficient. The focus needs to be about more than the channel, instead, the supply chain needs to be driven through strong horizontal processes bidirectionally from market to market. Accomplishing the goal requires a redefinition of both buy-side and sell-side processes, and the use of new forms of analytics to sense, shape, and orchestrate bidirectionally market to market. 

The features from the previous chapter s models, when considered with other factors like customer demand-driven needs, wants, desires, and price point supply side service feeds the effect of the Internet, business strategic solutions and technology options, along with their interrelated and interconnected links, can be drawn into a new topology model termed the Service Value Network Framework Model. 

To be specific, focus on a p icular node,y, in the network. Suppose nodey has a single upstream node i, which supplies any replenishment orders from j. Since base-stock control is followed throughout the network, each node is driven directly by the external demand process, which we continue to assume to be a Poisson process with rate A. 

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