Demand shaping

An important market is for the field magnets in small d.c. motors for which the shape demands high coercivity. Automotive applications for small motors include the windscreen wiper (see Fig. 9.59(a)) and air-blower, window lift, and pumps for fuel, ABS and power-steering. Similar motors are used in washing machines and general kitchen appliances and also for portable tools. Another important application is for stepping motors which convert electrical impulses into incremental mechanical movements for clocks, copying and fax machines and medical equipment. 

As the supply chain matures, supply chain leaders partner with the commercial teams to design outside-in processes that can better sense and shape demand. They use these insights to drive a more profitable response. In our interviews for this book, 5 percent of companies were at this stage of maturity, which is often termed demand driven. 

This was a public admission of demand network failure. With the creation of Coca-Cola Enterprises in 1986, Coca-Cola was the darling of Wall Street. The company divested assets to improve its return on assets and financial fundamentals. What was not obvious then—and is all too clear now—was that when a company sheds assets, it must redesign to sense and shape demand to drive market performance. The more extensive the supply chain and the more third-party nodes, the greater the challenge and the more critical it is to sense demand and service a network. Form needs to follow function. Alignment and strategy are essential. 

Demand orchestration The process of making trade-offs market to market based on the right balance of demand risk and opportunity. These trade-off decisions are dependent on the use of advanced analytics to sense and shape demand simultaneously. 

Downstream data The use of channel data to sense and shape demand. This can include data for sales at the point of transaction, sales through distributors, inventory in channel trading partners warehouses, and demand insight data. 

Demand shifting The shifting of demand from one period to another. This includes advanced shipments and moving product into the channel without stimulating actual sales. Demand shifting without shaping demand is a form of supply chain waste. 

Most companies do not have the luxury to wait for demand to occur and then react to a customer order. Because of the intricacies of supply chain processes, they must plan to be ready to fulfill channel sales. This includes sensing demand signals, proactively shaping demand, and translating demand into the most effective supply response to meet customer orders. 

The focus in market-driven value networks is to sense and to shape demand to orchestrate the demand response. As shown in Figure 1.3, it happens in stages ... 

Stage 4 The supply chain creates the adaptive enterprise. At this stage of development, the company develops mature processes for revenue management and makes trade-offs in chaimel strategies based on baseline lift factors. The focus is on sensing and shaping demand. This is often referred to as a demand-driven supply chain. 

Traditional view of supply chain excellence. For demand-driven initiatives to be successful, they must extend from the customers customer to the supplier s supplier. The concepts of demand latency, demand sensing, demand shaping, demand translation, and demand orchestration are not widely understood. As a result, they require education and a business champion. Organizations not familiar with the concepts will not understand why the demand management processes need to change. 

Shape demand using advanced analytics to create a more accurate unconstrained demand forecast. 

For many, this is a radical shift. Most demand forecasting processes are supply driven with little emphasis on predicting unconstrained demand, let alone shaping demand. In the interviews of 75 supply chain pioneers, when we asked about demand shaping, we found that most companies shift, versus shape, demand to meet supply constraints. Today, the norm is fitting demand to supply, rather than supply to demand. 

Leverage a demand management technology to automate forecasting workflow to create a more accurate unconstrained demand forecast. The enabling solution should provide a user-friendly interface that allows nonstatistical users (or planners) to systematically run what-if analyses to shape demand. 

When companies shape demand (the combination of price, promotion, marketing, sales incentives, and new product launch), dollars are spent to stimulate purchase behavior and increase sales lift. Most often, these demand levers are not pulled singly or separately instead, they are used together. As a result, data analysis is difficult. 

Match Demand with Supply Shape Demand Demand Market to Market... 

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. 

S Ask sales Focus on market drivers Ho a/ do w/e best shape demand ... 

Sense. Reduce demand latency through the use of channel data. Use this redefinition to build outside-in processes to sense and shape demand. 

Reward systems. Businesses and supply chains are functionally organized and rewarded. This functional orientation limits organizational progress toward building horizontal systems and shaping demand. 

Building the right horizontal connectors. How can the organization build strong horizontal processes to sense, translate, and shape demand while sensing and translating supply risk What is the best way to connect research and development (R D) launch plans to horizontal processes How do horizontal processes best support the business strategy Who should lead them Is there a need for a formal commercialization process and turnover ... 

As mentioned earlier, protection, preparation, and evacuation are the means of shaping demand, as they reduce demand for relief supplies. Evacuation can create a positive or negative social value depending on whether the site from which evacuation takes place is actually hit by the disaster. For example, when people are evacuated from a region in anticipation of a disaster and the disaster does not materialize, a negative value is created because of the inconvenience of evacuation. 

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