Demand and supply integration drives operations performance

RandyLittleson

IndustryWeek has a new article talking about the significant benefits associated with delivering decision makers an integrated view of demand and supply.  Operations performance breakthroughs are enabled when people are empowered with this holistic visibility.

As the article points out with explanation and examples, for too long companies have leveraged planning systems that operate in silos.  Demand planning systems focus on developing a demand plan and supply planning systems focus on developing a supply plan.

At an operational level, down in the trenches, the issue is about constantly dealing with misalignments in demand and supply.  The examples in the article point this out with great clarity.  Decision makers no longer care what the plan was, they have to deal with today’s reality.  The only way to do this is to understand an accurate view of what true demand and the current state of supply is – at that moment.  And, more importantly, they need to be able to leverage this to understand what is possible and what the impact of any proposed course corrections would be.

You’ll find demand planning systems and supply planning systems that represent themselves as offering visibility into the “other side” (demand planning systems that promote visibility into supply).  The problem you’ll find is that they do so at such a superficial level – enough to get a check mark – that it’s useless in truly solving real problems where course corrections are needed to solve a current problem.  In a planning context where the time horizon is months or more, this modeled view of supply reality is likely sufficient in a demand planning solution.  But this is completely inadequate when it comes to solving an operational performance problem today or this week when the customer is waiting for an answer.

Demand and supply integration put into the hands of decision makers with the tools to leverage that visibility to solve real world operational problems is the key to responding to the pervasive change that is driving the organization today.

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