Creating and sustaining collaboration between suppliers, manufacturing centers, logistics and fulfillment partners makes it possible for demand-driven organizations to orchestrate their response to customer needs more effectively. The best practices of companies that are attaining this high level of collaboration include the following:
Extensive reliance on Vendor Managed Inventory (VMI) strategies to increase inventory accuracy and velocity while minimizing risk. Using a series of scorecards and dashboards to measure the performance of VMI strategies over time and to also calculate cost and time savings is emerging as a best practice in measuring how demand-driven a supply chain strategy is. In the highest-performing companies, these metrics are often customer- and channel-based, which provides real-time visibility into how well VMI strategies are contributing to the goal of being demand-driven as well.
Using customer-based metrics to pursue demand visibility throughout their value chains. This translates into being transparent with suppliers and using role-based information supplied through Intranet portals to share forecasts with them. It also includes using role-based information management throughout manufacturing, quality management and channel management to make sure the organization stays synchronized on the same series of priorities.
Aggressive use of price management, cross-selling, promotion management and analytics to anticipate and orchestrate demand. Keeping supply chains, manufacturing, logistics and fulfillment synchronized
using real-time data from pricing, cross-sell and promotion management is a best practice that demand-driven companies aggressively pursue. Pricing data provides visibility into the elasticity of demand, and for those companies in commoditized industries, these insights are crucial for orchestrating demand. Cross-sell and promotion-management data provides visibility into how bundling, promotional programs and strategies are impacting demand. By integrating quoting, sales and product configuration systems into role-based ERP systems to get this data to teams who need it in real time, demand-driven strategies are delivering strong financial results.
Figure 1: Foundations of the DDSN Framework Source: The Handbook for Becoming Demand-Driven. AMR Research, July 2005 (Click image to enlarge.)
Orchestrating demand is the highest level of performance demand-driven companies are attaining. Getting to that level of performance starts with a clear focus on customer-based metrics and the use of role-based information to immediately know the impact of price-management, cross-sell and promotion-management strategies on demand so it can be collaboratively responded to in real time.
This is an excerpt of “Ten Strategies for Turning Your Company’s Knowledge into a Competitive Advantage.” To download the full document, visit http://erp.cincom.com/resources.