The New Rules of Demand/Supply Integration
By Eric Pfeiffer, Senior Diretor of Supply Chain Management, HAVI
A critical factor in battling for consumer market share in today’s digital age is how well businesses can achieve demand and supply integration functions to achieve strategic goals. Real-time digital interactions with end consumers via social media, mobile apps, online ordering and other channels offer new opportunities to deliver marketing offers and shape demand.
They also present challenges for the supply chains working to meet that demand. Companies that implement demand/supply integration (DSI) can not only leverage these digital engagements to shape demand, but also better enable themselves to meet their business objectives.
Demand/supply integration (DSI)
True DSI is a cross-functional process for planning a go-to-market strategy by aligning marketing and promotions, supply chain and operations with business objectives. Simply put, DSI takes demand information and matches it up against supply capability and financial objectives to make both tactical and strategic decisions about what to do in the future to achieve demand and supply integration.
Consider a quick-service restaurant scenario: if comparable same restaurant sales aren’t growing fast enough to reach revenue targets, DSI enables senior leadership to identify this shortfall, then use advanced analytics to develop an action plan that will drive demand. For example, a QSR could use machine learning to simulate the performance of a limited time offer on a sandwich, then execute on it by sending a push notification in its mobile app. The key though, is that such a plan would be implemented in tandem with the supply chain, to ensure the restaurant can meet the increased demand for the sandwich.
Longer term, digital engagement models will continue growing with new platforms and shifts in consumer preferences. That makes seamless coordination of DSI within an organization all the more critical, especially for major, international companies that deal with perishable goods such as restaurants or food service providers. Yet, it would be misleading to suggest that such a process is easily implemented or maintained in the demand and supply integration processes.
Copyrights Digital Supply Chain