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Your shelf-connected checklist: How Demand-Driven are you?

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The terms “shelf-connected” and “demand-driven” have been in use for years within the supply chain community.  The prevailing strategy that traditional ERP/MRP vendors have focused on to achieve being shelf-connected is to implement Collaborative Planning, Forecasting, and Replenishment (CPFR).

Yet today’s advanced capabilities around Demand Driven Value Networks (DDVN) have dramatically changed the game.  What is a DDVN? Gartner Research defines it as a “business environment holistically designed to maximize value of and optimize risk across the set of extended supply chain processes and technologies that senses and orchestrates demand based on a near-zero-latency demand signal across multiple networks of corporate stakeholders and trading partners”.

So are you truly shelf-connected? If you can answer “Yes” to the following 12 questions then you do.  If not, you may have room for improvement.  In this first post I’ll go through the first 3 questions:

1. Does collaboration with my suppliers and retailers incorporate the following?

a. Future demand

b. Real-exception management

c. Both structured and unstructured data

Explanation: In CPFR the collaboration is primarily related to future demand and supply and limited to structured data. In a DDVN the collaboration extends beyond future demand to real time exception management, using both structured data as well as providing a framework to manage unstructured data within the platform.

2. When planning, can my plan accommodate all of the following?

a. Single party relationships

b. Multi-party relationships

c. Multiple supply chain echelons (e.g. different tiers of suppliers, logistics, etc)

Explanation: In traditional systems like CPFR, the planning is typically limited to single party relationships. In DDVN, the planning extends to multi-party, multi-echelon—across the entire supply network.

3. When planning, can I optimize all of the below?

a. Orders

b. Inventory

c. Shipping

d. Revenue

e. Cost

Explanation: In a DDVN, because the planning and optimization occur across all nodes in the supply network, all available levers including orders, inventory, shipping revenue, and cost can be utilized. Because CPFR is limited to single party relationships, the types of plan optimizations available are based on that trading relationship.

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.

Aaron Pittman