A few years ago, Mike Myers starred in a comedy called Wayne’s World. It was a show about a couple of doofusses who somehow managed to score a gig hosting a late night talk show from their parent’s basement.
During one meeting with some network executives, Wayne was getting a little befuddled with the conversation. The scene went something like this…
Exec: “blah blah blah blah yaddy yaddy yaddy”
Wayne: “say what?”
Wayne: “say what?”
I think we can learn something from this doofuss.
Today, in the supply chain planning, everyone is focused on becoming demand or market driven. No issue with that and we concur completely.
However, how do you get there? Here’s some advice from one of the leading experts I came across recently that might help in your journey…
- First, invest in cloud-based analytics
- Next, get demand data by channel partners
- Then, build or acquire systems to synchronize and harmonize channel demand data with new forms of analytics to recognize patterns
- Next, make sure you take advantage of the new attribute-based modeling capabilities available to allow you to sense, learn and then act
- After that, build horizontal processes with a focus on orchestration
- Finally, invest in business networks and inter-enterprise systems of record
Gee, that seems pretty straightforward. Why didn’t I think of this? I only have one question…
Becoming demand or market driven isn’t about stringing together a bunch of buzzwords or throwing a bunch of terms against the wall and hoping they’ll stick. Can you really make sense or implement the above?
How about this instead:
- First, read our book Flowcasting the Retail Supply Chain and ingrain the principles
- Then, design your processes and orient your teams to predict consumer demand, in a time-phased fashion, item by item, store by store
- Research and select a system capable of enabling the Flowcasting process
- Implement Flowcasting
I realize that this is a significant undertaking requiring serious change.
However, if you follow this approach you’ll be completely demand/market driven and every member of your extended supply chain will be working to the drumbeat of the real consumer. Everyone will be working to a single set of numbers.
You’ll have a model of the business between you and your trading partners, not just a demand plan. What’s a model of the business? Well, it’s all projected flows for all products from factory to shelf, for a full year into the future.
Imagine what you can do with that?
You’ll be able to collaborate where it matters and do simulations and what-ifs that will allow you to improve service and reduce costs
You’ll also be able to convert these projections to any unit of measure you desire, including financial and capacity numbers
You’ll finally be able to gain control of the business
Everyone agrees they need to become demand driven. How you get there is up to you. I’d just hate to see you select an approach that’s difficult to explain and understand right from the get go.
After all, if you do, you’ll have a number of people asking or thinking…
More Stuff – Fundamental lack of understanding
Here’s an excerpt from one the world’s leading consulting organizations talking about Demand Driven Supply Chains…
With a DDSC, the supplier’s employees can take a more proactive role, suggesting a larger or smaller order if consumption data show the need—or even contacting the retailer before an order has been placed if POS data show that inventory is getting low.
This advice is complete stupidity and demonstrates a fundamental lack of understanding!
With Flowcasting, everyone would be using the same process and system. The POS forecast is driving all associated flows from factory to shelf. There would be no need for the supplier to adjust any planned orders based on consumption. Why?…
They’re already adjusted and always up to date!