Traditional supply chain management follows a siloed structure which is inherently reactive and lacks the capability to adapt and become flexible to rapidly changing realities of the modern economy. Inflexibility may create issues for the company in terms of supply and demand planning as well as demand volatility. Due to recognized weaknesses of the traditional approach, companies are focusing on accurate demand planning through the use of technology which allows predicting patterns and promptly responding to market trends (Vanguard Software, 2017).
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Supply chain executives continuously emphasize demand volatility and the lack of demand visibility as the greatest barriers to a company’s innovation and growth. A business must be able to rapidly and efficiently process and respond to changes in consumer demand to remain successful. The method of improving demand planning is based on forecasting, planning, demand sensing and shaping, and fulfillment.
These capabilities should be actively coordinated in order to optimize demand processes that would serve a variety of consumers channels with differentiated products. As an example, specific segments may require production to use a make-to-forecast model, while other industries are strictly on a make-to-order basis (Supply Chain Quarterly, 2016). The most efficient supply chain systems in organizations with high demand overview a wide variety of factors beyond historical sales trends. It is vital to consider signals in consumer behavior and lifestyle trends which may indicate demand changes. These may include sale forecasts, marketing plans, and even feedback from the retail point of sales.
Some of the recommendations to improve supply-demand management include close integration and coordination between all strategic processes. Demand generation and demand fulfillment should be coordinated to ensure efficiency. It is essential to establish configuration and coordination of operations, including through social interactions and information sharing within inter and intra-company environments.
Furthermore, increased focus should be made on the customer (demand) and supplier segmentation, performance indicators, and marketing activities (Melo & Alcântara, 2016). These are methods which can improve the level of adherence to demand management that are evident in a variety of industries such as coffee (restaurant) and retail.
Melo, D., & Alcântara, R. (2016). What makes demand management in the supply chain possible? A multiple-case study of critical success factors. Gestão & Produção, 23(3). Web.
Supply Chain Quarterly. (2016). Demand management needs to incorporate more than just planning and fulfillment, says Gartner. Web.
Vanguard Software. (2017). Seven benefits of integrated demand-supply planning. Web.