Demand-Driven Supply Networks (DDSN)
If we look at the supply chain for fast moving consumer goods (FMCG), the echelons go from point-of-sale data regarding the final customer, through retailer inventory, back to raw material storage- not just the distribution centres that traditional inventory management or Distribution Requirements Planning considered.
What’s not going to help in planning even a straightforward product such as ketchup, are unreliable lead times, and different forecasts at different stages in the chain. The push/pull boundary must be located taking into account the customer’s expectation for availability, and the competition’s order-to-delivery cycle time.
The path to maturity in DDSN goes through 4 levels
- Every department for itself. Slow & sequential planning. “Planners” spend most of their time scrubbing data. Each company cannot collaborate with itself!
- Every company for itself. Internal optimisation. Sales & Operations Planning involves only regular meetings between senior departmental managers.
- Single tier partnering. Data sharing.
- Orchestrating the supply chain. A multi-tier federation, relying on visibility. Demand shaping; available-to-promise calculations take into account order profitability.
The journey needs to be enabled by IT, moving away from transaction processing, to relationship-based workflows. From track & trace, to operating the supply chain network profitability.
Traditionally, systems address the supply chain from the supply side, using forecasting to push product into the system. We still see this in effect today, where companies such as energy utilities blame the market for their own poor customer service.
|
 |
SERVICES |
|
