Executive Briefings

10 Years After: How Close Are We to True Demand-Driven Supply Chains?

It's been about a decade since companies began talking about the dream of a truly "demand-driven" supply chain. How far have we come? Roddy Martin, managing director of Accenture Supply Chain Strategies, provides a progress report.

It’s been 10 years since companies began striving to create “demand-driven” supply chains. Today, says Martin, they’re realizing that “perhaps it’s not quite as short a journey as we thought it would be.”

Progress has been made, however, especially among consumer-driven retailers and even some large industrial manufacturers. “We’re way down the road,” says Martin, whose comments came at the annual Kinaxis user conference.

Why has the journey been so difficult? One reason lies in companies’ heavy investment in traditional enterprise resource planning and demand-planning infrastructure, says Martin. That has led to an “inside-out” focus with businesses. But the volatility of demand, coupled with growing risk in global supply chains, has shown that this approach won’t give companies the agility they’re seeking. What they need to be pursuing is the ability to conduct demand sensing and shaping within their supply chains, made possible by complete visibility of inventory at all points.

“If we’re at the wrong place at the wrong time [with product], we end up with waste,” says Martin.

The push for demand-driven supply chains has to come from the top. The common characteristic of best-in-class companies is that they are “leadership driven,” says Martin. Making the transition from manufacturing push to demand pull is no small step. It requires executive commitment to a multi-year journey.

Even as companies strive to reach the demand-driven goal, it tends to recede, as markets become even more unpredictable and levels of risk rise. Still, there are a number of new tools that can help. Chief among them is the cloud-based control tower. “It’s an exciting opportunity to really flip the switch – to start integrating people, process and technology,” says Martin.

Companies need to understand that a demand-driven approach isn’t limited to their own four walls. “The beauty of the whole theory of the control tower is that it’s inside and outside the walls of the organization,” Martin says. “It allows us to connect to structured and unstructured data, and it’s process oriented. It’s not just about the technology.”

To view the video in its entirety, click here

It’s been 10 years since companies began striving to create “demand-driven” supply chains. Today, says Martin, they’re realizing that “perhaps it’s not quite as short a journey as we thought it would be.”

Progress has been made, however, especially among consumer-driven retailers and even some large industrial manufacturers. “We’re way down the road,” says Martin, whose comments came at the annual Kinaxis user conference.

Why has the journey been so difficult? One reason lies in companies’ heavy investment in traditional enterprise resource planning and demand-planning infrastructure, says Martin. That has led to an “inside-out” focus with businesses. But the volatility of demand, coupled with growing risk in global supply chains, has shown that this approach won’t give companies the agility they’re seeking. What they need to be pursuing is the ability to conduct demand sensing and shaping within their supply chains, made possible by complete visibility of inventory at all points.

“If we’re at the wrong place at the wrong time [with product], we end up with waste,” says Martin.

The push for demand-driven supply chains has to come from the top. The common characteristic of best-in-class companies is that they are “leadership driven,” says Martin. Making the transition from manufacturing push to demand pull is no small step. It requires executive commitment to a multi-year journey.

Even as companies strive to reach the demand-driven goal, it tends to recede, as markets become even more unpredictable and levels of risk rise. Still, there are a number of new tools that can help. Chief among them is the cloud-based control tower. “It’s an exciting opportunity to really flip the switch – to start integrating people, process and technology,” says Martin.

Companies need to understand that a demand-driven approach isn’t limited to their own four walls. “The beauty of the whole theory of the control tower is that it’s inside and outside the walls of the organization,” Martin says. “It allows us to connect to structured and unstructured data, and it’s process oriented. It’s not just about the technology.”

To view the video in its entirety, click here