Supply constraints? Demand-shaping revisited – Supply Chain Management Review





By ·

This column topic was originally discussed in my November 2013 Insights column. “Demand-shaping with supply in mind” dealt with activities that are primarily the responsibility of marketing and sales management. However, while not responsible for demand-shaping per se, supply planning managers ought to play two, not just one, important roles. Of course, the first of these is ensuring that supply is in place to meet all anticipated future unconstrained demand. The second, often overlooked, is advocating that “demand-shaping be done with supply in mind” whenever there are significant supply shortages. This role involves a better alignment of demand with potential on-hand, on-order, and procurable supply. Largely aimed at increasing profitability, revenue and asset utilization. Instead of just matching supply demand with no objective in mind.

Pull versus push supply chains

In 1998, at one of my first talks at a supply chain conference, I discussed the concepts of manufacturing “push” versus consumer “pull” supply chains. Back in the day, manufacturing organizations had a long history of pushing out finished goods for sales & marketing organizations to sell. Too often not considering what consumers might really demand. At the time I often used the phrase that supply chains were moving from “selling what one makes, to selling what one expects to sell.” Prior to the adoption of sales and operations planning (S&OP) processes in the mid-1980s, manufacturing planners would not give much credence to sales plans nor forecasts. S&OP’s use of an independent baseline unconstrained demand forecast, to start the S&OP process, created a trend away from push and toward pull supply chains—later termed demand-driven supply chains.

Future supply will require push as well as pull

By ·

This column topic was originally discussed in my November 2013 Insights column. “Demand-shaping with supply in mind” dealt with activities that are primarily the responsibility of marketing and sales management. However, while not responsible for demand-shaping per se, supply planning managers ought to play two, not just one, important roles. Of course, the first of these is ensuring that supply is in place to meet all anticipated future unconstrained demand. The second, often overlooked, is advocating that “demand-shaping be done with supply in mind” whenever there are significant supply shortages. This role involves a better alignment of demand with potential on-hand, on-order, and procurable supply. Largely aimed at increasing profitability, revenue and asset utilization. Instead of just matching supply demand with no objective in mind.

Pull versus push supply chains

In 1998, at one of my first talks at a supply chain conference, I discussed the concepts of manufacturing “push” versus consumer “pull” supply chains. Back in the day, manufacturing organizations had a long history of pushing out finished goods for sales & marketing organizations to sell. Too often not considering what consumers might really demand. At the time I often used the phrase that supply chains were moving from “selling what one makes, to selling what one expects to sell.” Prior to the adoption of sales and operations planning (S&OP) processes in the mid-1980s, manufacturing planners would not give much credence to sales plans nor forecasts. S&OP’s use of an independent baseline unconstrained demand forecast, to start the S&OP process, created a trend away from push and toward pull supply chains—later termed demand-driven supply chains.

Future supply will require push as well as pull

 

 








Subscribe to Supply Chain Management Review Magazine!

Subscribe today. Don’t Miss Out!
Get in-depth coverage from industry experts with proven techniques for cutting supply chain costs and case studies in supply chain best practices.
Start Your Subscription Today!


Article Topics

Demand Planning &middot
All Topics





Source link

Latest articles

Related articles

spot_img