Central to demand-driven supply chains are technology platforms that allow demand planners and commercial teams to seamlessly collaborate, and to incorporate market and customer insights into their demand plans, Lin says. Advanced planning systems coupled with warehouse management automation tools can strengthen forecast accuracy and allow organizations to maintain leaner inventory levels. Investing in strong supplier collaboration platforms to gain visibility into critical data, such as supplier inventory levels and delivery status, is also key, Lin says. Access to accurate and real-time (or near-real-time) data allows for scenario planning and the ability to adjust plans based on evolving demand patterns. Centralized reporting that consolidates disparate data sources from across an enterprise enables supply chain organizations and cross-functional teams to work off the same source of truth and engage in meaningful discussions of trade-offs of different courses of action. Two other solutions will be important in many demand-driven supply chains. One is a technology solution that can make multiple complex systems and processes work seamlessly together, or what Geale calls an “orchestration layer.” The other is “the data layer,” or systems that can capture data, gure out what is useful, and then leverage it to make smarter and faster decisions. “Without those two guardrails, we risk creating science projects rather than recalibrating how businesses operate,” Geale says. More to Come The prevalence of demand-driven supply chains will increase as companies search for ef cient, cost-effective answers to their challenges and as they strive toward a more transparent and connected world. Technology is also driving this shift. With the growth of arti cial intelligence and automation solutions, demand-driven supply chains will gain momentum simply because it will become easier to implement them.
Demand-Driven In Action Here are some examples of industries and companies known for embracing demand-driven logistics: Retail: Many large retailers, especially those with strong e-commerce presences, utilize demand-driven strategies. Amazon, Walmart, and Target leverage real-time data on customer purchases and trends to optimize inventory levels and predict demand fluctuations. Consumer Electronics: The fast- paced and ever-changing world of consumer electronics necessitates a demand-driven approach. Apple and Samsung utilize sales data and pre- orders to optimize production and manage inventory. Food and Beverage: Demand for fresh produce and other perishables can be unpredictable. Nestle and Kraft Heinz use demand-driven logistics to forecast demand and optimize transportation and storage to minimize spoilage. Manufacturing: Manufacturers that produce customized or build- to-order products benefit from
Data captured from demand-driven supply chains can help reduce excess inventory. inventory. demand-driven excess
AI can help identify trends and patterns, and pass along information, while automation can help streamline tasks and work ow. “We nd more adoption and uptick with these solutions now that AI and automation are becoming prevalent in a lot of supply chain technologies,” Sripada says. However, the shift to demand-driven supply chains likely won’t be a straight, vertical line. In the short term, the skills and technologies companies need to make this transition are within reach mostly for companies with budgets that are large enough to excite big tech vendors, as well as the clout to change supply markets, Geale says. For demand- driven approaches to be widely adopted, the sector needs access to scalable and affordable solutions. Gaining access to supplier data is another “elephant in the room,” Geale says. Without this, the gaps in the information that companies can assemble often make it less reliable and useful. Organizations that can tackle these challenges and establish demand-driven supply chains will reap bene ts. “Companies that do demand-driven well are more competitive and can better service their customers,” Clevenger says. “That’s what we’re all about: providing value and servicing customers effectively.” n trends and information, and
demand-driven logistics. Dell and Nike are known for using these techniques to tailor production based on actual customer orders, reducing waste and lead times. Smaller businesses can also benefit from these practices by implementing tools such as data analytics and collaboration with suppliers to better anticipate customer needs.
136 Inbound Logistics • July 2024
Powered by FlippingBook