‘Demand Driven’ is the link missing in many supply chains. Many software sales people have muddied the term ‘Demand Driven’ with sales forecasting and demand planning to confuse the buyer. To ‘Tighten the Links in Your Chain™’, you need to determine your weak links, and of these, which will deliver the best ROI when replaced. Demand Driven concepts are often misaligned with old processes and systems. That’s why demand driven process are always a great place to look for new opportunities to improve.
What you don’t know about demand driven retail will cost you…..
Studies by groups like Gartner (see link) show that user groups say Forecast accuracy is the largest barrier and ‘end to end process’ is the second largest barrier to achieving supply chain goals and objectives. The same user groups say that a ‘lack of external cross-functional collaboration’ by the suppliers is not a barrier. The key thing to notice is the users said demand forecasting accuracy and end to end synchronizing are key barriers, not supplier collaboration? Tell me, how to you deliver demand forecast accuracy and end to end synchronization without supplier collaboration? Maybe the user groups in the survey were confused from reading a lot of software company white papers? Take a few minutes today and review some key ideas to building a demand driven supply chain, and then find a link in your chain to tighten.
“It is not the strongest of the species that survives, nor the most intelligent, but rather the one most adaptable to change.” a paraphrase of Darwin in the writings of Leon C. Megginson
The Demand Driven Changes You Need
The nature of retail is changing. The key to being continuously profitable during this change will be in a new strategic approach to demand driven inventory planning.
Your ability to turn a visitor into a customer will be based on respecting the ease in which today’s consumer can develop product information and accomplish price line comparison. The customer is the power broker. The success of today’s retailer is being driven by the purchase decision of “the final-end customer and their demand signals“. Your ability to capture those demand signals and translate them to your demand driven inventory plan, in the same time cycle the demand occurs in, is critical to the growth of your business. To get there requires investment in your demand forecasting and inventory management software. An investment that promises improved operational performance and profitable response.
Read more on the ROI found by improving Your Demand Forecast and Learn a few methods to calculate that ROI (note we did not say ‘sales’ forecasting). Click here to learn- Proof: Improving Forecast Accuracy delivers High ROI
The investment in a Demand Driven Supply Chain includes:
- A more collaborative Supply Chain with the availability of demand data provided to both vendor and retailer. In this changing retail environment, the value of a vendor is not in the savings afforded in the procurement process, but in the response provided to your customer’s demand. The need to respond to customer demand is shared by both;
- Redesign of Supply Chain capabilities in data capture and manipulation to enable response to the demand signals when they occur and to determine the right set of metrics to manage that response;
- Viewing the role of Supply Chain as a strategic partner within the organization with broader responsibilities to utilize the value described above. Broaden the Supply Chain span of control to go beyond warehousing and include data based forecasting and replenishment. Enable Supply Chain leadership and intra-organization collaboration around the planning process.
Your Growth and Future Profitability Depend Demand Driven Technologies
Demand driven inventory planning is not just about big data. It’s about capturing and manipulating demand data in an organizational model focused to deliver product on time. You need a collection of good forecast algorithms to apply your data against, not just two or three. Don’t confuse ‘models’ for algorithms – the sales guys may tell you they are the same. Finally, you need a delivery software that can touch all the related links in the supply chain from supplier to buyer to Dc to selling location. There are better solutions available that cost a lot less money than your legacy software.
Every Secret has a Key
Are you ready to apply the secrets of Demand Driven retail to your business? We have the people, the experience and the advanced technologies to help you.
Contact Us for help finding your key Demand Driven opportunities to ‘Tighten the Links in Your Chain™’.
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