Check the box if you're demand-driven.....

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Note, this is part three of an ongoing series. In part one and part two I explained how the terms “shelf-connected” and “demand-driven” have been in use for years within the supply chain community, but only recently has demand-driven value network technology emerged and matured enough to truly be a game-changer.

Here is part three of the checklist with explanations. Questions 1-3 are here, questions 4-7 are here, and a full-length pdf version can be found at Your Shelf-Connected Checklist Brief.

8. Can I automatically adjust these forecasts based on consumer-level demand

A. Yes

B. No

Explanation: In traditional systems like CPFR< product is pushed to the store based on a forecast with little or no basis for how much the individual SKU is actually selling for that particular store. DDVN systems enable a true pull-based approach to retail replenishment that uses actual daily consumer-level demand to generate a new (true) forecast for each item at the shelf as often as is needed.

9. Assuming replenishment is already in motion, do I have the ability to perform last minute reallocations based on real time demand feedback?

A. Yes

B. No

Explanation: In CPFR, demand signals are typically serial in nature across the supply chain with latency related to information cycle times as well as physical lead times, resulting in lost sales and excess/obsolete inventory. In a DDVN, real time order visibility throughout the supply network makes last minute reallocations a possibility, solving problems before they even arrive.

10. Have my working capital levels reduced over time?

A. Yes

B. No

Explanation: In CPFR, working capital as well as cash-to-cash cycle times suffer significantly due to compounding errors in both demand and supply. In DDVN, working capital requirements are significantly reduced due to reduced cycle times across the network in both information as well as physical movement, resulting in higher CSL’s, lower inventory, and the capture of more profitable demand.

11. Can I perform useful trade-off analysis as needed?

A. Yes

B. No

Explanation: The batch-driven, serial nature of CPFR does not allow for proper trade off analysis. In DDVN however, micro simulations are constantly running in the background with the support of automated process robots. Trade-offs are either done based on policies or presented to the user with various resolution options along with the associated predicted outcomes.

Stay tuned for the rest of the checklist in future posts, but if you want to read the whole thing now then you can download at the following link: Your Shelf-Connected Checklist Brief.

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Aaron Pittman

Aaron is former Corporate Counsel/Director of Marketing at One Network Enterprises,A lawyer by training, heprovides practical advice regarding regulatory, compliance, and transactional matters, and also leads global marketing and communications activities including content, messaging, and analyst and press relations. He holds degrees from Vanderbilt University and the University of Michigan Law School.