It is exactly the wrong time to abandon a demand-driven approach to the supply chain.
Is it time to say goodbye to the demand-driven supply chain? That was the startling question one company executive posed during a recent software provider’s user group, according to press reports.
The executive delivered a one-two punch: One, a focus on the demand-driven supply chain can be misleading because the emphasis is on forecasting, not the end goal of the process, he said. Two, we should move to what he terms a “service-driven supply chain”, which is the true goal of every supply chain process, he added.
Apart from the fact that “forecasting”, by definition, is a projection pushed at the market, not listening to a demand signal, I have an answer to his question: Ah, no. It is not time to abandon demand-driven logistics. In fact, it is exactly the wrong time to abandon it.
We are standing on the brink of having AI empower the demand-driven supply chain, and blockchain providing a clear, instantaneous, and immutable stream of demand signals all the way back downstream to even the earliest demand chain stakeholder. Solutions (not just Software-as-a-Service) and obsolescence for demand planning and demand forecasting are fast approaching. That transition will truly make the world your warehouse. And that transition is demand driven.
If all you have is a hammer, everything looks like a nail. Consequently, if you come at the issue from only a technology perspective, you miss the underpinnings of success. Even the best demand-forcasting technology is not the panacea many think it is, or think it was, if it stands alone.
Technology is only one leg of a three-legged best-practices stool. You need vision and commitment, and a path to adopting demand-driven logistics across your enterprise. Since 1981, this publication has been making the case for listening, finding that demand signal, hearing your customers’ needs, and building the philosophical and operational structure, all the way back to your vendors if need be, to serve that need. Service.
Semantics aside, a demand-driven supply chain is actually a service-driven supply chain. But if the commitment and structure is not there, it is markedly difficult to match your customers’ service expectations. For what exactly is a demand signal from your customers if not an expression of their wish for excellent service?
Did I say “wish”? I meant demand.