when providing development samples, non-automotive customers required much faster turnaround than automotive clients. “We had to learn to adapt and make that speed part of our operating system,” he says. Adjust Through Teamwork It’s not always possible to adjust to every customer request. For instance, Clevenger once oversaw an assembly line that served more than 100 customers, making constant adjustments impossible. Instead, his team consistently communicated with suppliers, sharing customer insights and their responsive actions. This allowed suppliers to align their responses as appropriate, he says. Agile procurement practices and diversi ed supplier networks can also help companies respond to customer demand. “Develop contingency plans to react to changing demand,” Lin advises. This also builds up resilience against unforeseen supply chain disruptions. “ The ability to sense, adapt, and respond to demand changes quickly is the key differentiating factor of demand- driven supply chains as compared to traditional supply chains. ” —SRIKANTH SRIPADA Managing Director, West Monroe
silos so all areas gain visibility to events across the supply chain. Establishing seamless communication and work ows across the network helps all functions respond more quickly to demand changes. “Culture and collaboration ultimately empower agility and exibility across the supply chain network,” Sripada says. Several tactics can help organizations address these challenges and gain the performance bene ts that can result from demand-driven supply chains. First, to really become demand- driven, organizations need to become data-driven, Sripada says. This means gathering granular, customer-centric data and transmitting the relevant information across the supply chain. This shift can require data and analytics solutions that consolidate data in a central place and integrate disparate information systems, such as supply chain and transportation systems, to supplier and customer data. Second, focus on the end-to-end value chain, rather than separate processes, says Simon Geale, executive vice president of procurement with Proxima, a procurement consultancy. This may mean shifting reporting lines Data-Driven For Demand-Driven so that procurement reports to supply chain, for instance. This is most likely to occur for direct materials or goods for resale, and where procurement is part of a more holistic process. Or, procurement and supply chain might fall under a new, cross-functional ownership model. No matter how the organizational chart changes, the basic principle remains the same: “Commercial process and product journeys are cross-functional and optimization means being able to see how these knit together,” Geale says. Understand Customers Third, demand-driven supply chain organizations need to understand and adapt to their customers’ operations and preferences. Clevenger provides an example from his days in manufacturing:
Along with securing inventory, implementing a demand-driven supply chain requires rming up transportation, warehousing, and labor capacity. “That means examining factors such as how much warehouse space and how many shifts and people you require,” Goyal says. The Role of Technology As companies consider real-time market signals, they can leverage advanced analytics “to course-correct while in motion in order to recover cost and improve service,” says Ann Marie Jonkman, vice president, industry strategies with Blue Yonder, a supply chain management company. Generative arti cial intelligence (Gen AI) can “tie together planning, route optimization, forecasting, and execution across the supply chain,” she says. To provide visibility across their supply chain networks, more organizations are implementing solutions such as supply chain control towers, or cloud- based solutions that leverage advanced technologies, like AI, machine learning, and Internet of things (IoT) to proactively manage their supply chains. These solutions can provide visibility both within the organization and across the network to suppliers, logistics providers, and others. As supply chains become more interconnected, demand-sensing solutions that use real-time data and advanced analytics to anticipate and react to demand signals are starting to appear in some mainstream supply chain planning software solutions. Forecasting technologies can help supply chain organizations understand, sense, and shape their forecasts, and then drive inventory and ful llment policies based on expected demand, Goyal says. Cloud technologies are now advanced enough that they can detect potential risks and disruptions ahead of time, and evaluate the actions an organization can take, should the disruptions occur. This includes actions that likely will occur outside the organization, such as collaborating with suppliers.
July 2024 • Inbound Logistics 135
Powered by FlippingBook