Accenture – 10 Years After: How Close Are We to True Demand-Driven Supply Chains? SupplyChainBrain & Kinaxis Video Series

MelissaClow

SupplyChainBrain attended our annual Kinexions user conference, and while there, they completed a number of video interviews with customers, analysts, and Kinaxis executives. And, we’d like to share them!

It’s been about a decade since companies began talking about the dream of a truly “demand-driven” supply chain. How far have we come? It’s been 10 years since companies began striving to create “demand-driven” supply chains. Today, companies are “realizing that perhaps it’s not quite as short a journey as we thought it would be,” says Roddy Martin, managing director of Accenture Supply Chain Strategies.

Progress has been made, however, especially among consumer-driven retailers and even some large industrial manufacturers. “We’re way down the road,” says Martin, whose comments came at the annual Kinaxis user conference.

Why has the journey been so difficult? One reason lies in companies’ heavy investment in traditional enterprise resource planning and demand-planning infrastructure, says Martin. That has led to an “inside-out” focus with businesses. But the volatility of demand, coupled with growing risk in global supply chains, has shown that this approach won’t give companies the agility they’re seeking. What they need to be pursuing is the ability to conduct demand sensing and shaping within their supply chains, made possible by complete visibility of inventory at all points.

Watch now: 10 Years After: How Close Are We to True Demand-Driven Supply Chains?

“If we’re at the wrong place at the wrong time [with product], we end up with waste,” says Martin.

The push for demand-driven supply chains has to come from the top. The common characteristic of best-in-class companies is that they are “leadership driven,” says Martin. Making the transition from manufacturing push to demand pull is no small step. It requires executive commitment to a multi-year journey.

Even as companies strive to reach the demand-driven goal, it tends to recede, as markets become even more unpredictable and levels of risk rise. Still, there are a number of new tools that can help. Chief among them is the cloud-based control tower. “It’s an exciting opportunity to really flip the switch – to start integrating people, process and technology,” says Martin.

Companies need to understand that a demand-driven approach isn’t limited to their own four walls. “The beauty of the whole theory of the control tower is that it’s inside and outside the walls of the organization,” Martin says. “It allows us to connect to structured and unstructured data, and it’s process oriented. It’s not just about the technology.”

Check out the other videos in this supply chain interview series:

 

MelissaClow

As Kinaxis’ online community manager, Melissa serves as a connector, facilitator, and information resource for the Supply Chain Expert Community. Her blog focuses on what’s happening in the community and supply chain industry news. Melissa loves hearing from Members who are passionate and want to share their stories! Please consider her your navigator to the Supply Chain Expert Community.

More blog posts by Melissa Clow

Discussions

  1. Interesting article on Demand Driven Supply Chains. However, I am a fan and supporter of Focus Forecasting. Focus Forecasting tests many different forecasting strategies each time inventory is to be ordered. It chooses the strategy that would have worked best the last time around:

    Whatever we sold during the last three months, is probably what the company will sell during the next three months.

    Whatever company sold last year in the next three months is probably what company will sell this year in the next three months.

    Whatever percentage company is running ahead or behind with last year on an item in the past three months is probably the percentage ahead or behind last year company will run in the next three months.

    The system selects the one best strategy to forecast this item at this moment in time through a simulation process. With simulation the system goes back three periods at a time and pretends they did not happen. System project the three periods using each of the strategies. The best strategy projected over the three periods is the one used to forecast the future.

Leave a Reply