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Demand chain management is the management of upstream and downstream relationships between suppliers and customers to deliver the best value to the customer at the least cost to the demand chain as a whole. The term demand chain management is used to denote the concept commonly referred to as supply chain management, however with special regard to the customer pull 1. In that sense, demand chain management software tools bridge the gap between the customer relationship management and the supply chain management 2. The organization’s supply chain processes are managed to deliver best value according to the demand of the customers. A study of the university in Wageningen (the Netherlands) sees DCM as an extension of supply chain management, due to its incorporation of the market orientation perspective on its concept3. While the term "demand-driven supply chain or network" denotes a set of concepts, the term "demand-driven execution" or DDE is used to express the means of achieving those concepts.citation needed
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Demand-driven supply network
A Demand-driven supply network (DDSN) is one method of supply chain management which involves building supply chains in response to demand signals. The main force of DDSN is that it is driven by customers demand. In comparison with the traditional supply chain, DDSN uses the pull technique. It gives DDSN market opportunities to share more information and to collaborate with others in the supply chain.
DDSN uses a capability model that consist of four levels. The first level is Reacting, the second level is Anticipating, the third level is Collaborating and the last level is Orchestrating. The first two levels focus on the internal supply chain while the last two levels concentrate on external relations throughout the Extended Enterprise4.
Competitive advantages
To create sustainable competitive advantages with DDSN, companies have to do deal with three conditions: Alignment (create shared incentives), Agility (respond quickly to short-term change) and Adaptability (adjust design of the supply chain)5.
Misconceptions
There are five common made misconceptions of demand driven (DDSN): 1) Companies might think they are demand driven because they have a good forecast of their company; 2) they have implemented lean manufacturing; 3) they have great data on all their customers; 4) they think it is a technology project and the corporate forecast is a demand visibility signal. 5) have a better view of customers demand.6.
DDSN uses a capability model that consist of four levels. The first level is Reacting, the second level is Anticipating, the third level is Collaborating and the last level is Orchestrating. The first two levels focus on the internal supply chain while the last two levels concentrate on external relations.4
An important component of DDSN is DDM (“real-time” demand driven manufacturing). DDM gives customers the opportunity to say what they want, where and when.
Further reading
References
- ^ Business forecasting, Demand planning, Inventory planning, Sales and operations planning, Sales forecasting software and services
- ^ QUANTOS SaRL - Demand Chain Management Solutions Take Hold With Selling Organizings, According To New Aberdeen Report
- ^ Abstract WU dissertation no. 4036
- ^ a b Martin R, 2006, GMA and AMR Research, The Demand Driven Supply Network DDSN, Your Business Operating Strategy; 15
- ^ Lee, H, 2004. The Triple –A Supply Chain. Harvard Business Review 82; 10 102-112
- ^ Cecere, L., Hofman, D., Martin, R., Preslan L., The Handbook for Becoming Demand Driven, AMR Research, Juli 2005; 4
See also
Wikipedia content modification information:
- This page was last modified on 9 December 2008, at 10:41.
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